Stocks are trading a little heavy today.
Yet being a stone’s throw from hitting new all-time highs, the recent Pfizer and Moderna news hasn’t continued the buying frenzy.
Better yet, our recent performance in the last 10 days has been remarkable.
The recent post-election trading has allowed us to close out our Wells Fargo (WFC), Murphy Oil (MUR), and Vale S.A. (VALE) for an overall gain of 260%.
Stimulus, the global lockdown, the weakening dollar, or ‘dark winter’...
Block out all the noise and we will come out ahead.
Now, The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 23.
That means we can see stocks ping back and forth like a bowling ball hitting the bumpers… so we need to be prepared to take swift action in the weeks ahead.
Remember, making money is FUN!
Make sure you take some of your gains and celebrate with your family.
(If you haven’t already, drop me a line and tell me how you did. You can reach me at [email protected].)
- Sell-To-Close the Murphy Oil Corp. (NYSE: MUR) Dec. 18, 2020, $10 call (MUR201218C00010000) at the market.
- Buy-To-Open the Vale S.A. ADR (NYSE: VALE) Nov. 27, 2020, $12 call (VALE201127C00012000) up to $0.25 per contract or better, for the day.
- Sell-To-Close the Vale S.A. ADR (NYSE: VALE) Nov. 27, 2020, $12 call (VALE201127C00012000) at the market.
Right now, we’re holding:
- Hostess Brands Inc. (NASDAQ: TWNK) Dec. 18, 2020, $15 call (TWNK201218C00015000)
- Sandstorm Gold Ltd. (NYSE: SAND) Jan. 15, 2021, $10 call (SAND210115C00010000)
Let’s keep focused and let the market come to us.
And I’ll be keeping you updated every step of the way.
Your Questions, Answered!
The mailbag is full, so let’s get to your most pressing questions.
I'd like to start entering more options trades of my own. Do you have training classes on options? What do you look for in the options that you recommend each week? - Nick F.
Tha’s great to hear that you’re motivated to take the next step in your journey!
I make trading options as easy as possible, but there’s a lot of opportunities for you to branch out and leverage.
There are a few things I would stick to when trading short-term call options…
- Options expiring in five to six weeks
- Call options that are in the money
- Use spreads
- Stocks with bullish momentum
I always want to buy enough time for us to be right. So, we’ve often stuck with options that expire five to six weeks out.
The extra couple of weeks provide a little more time to develop.
If you’re trading options on your own, I would also recommend looking at in-the-money options.
These are options where the strike price of the option is below the current trading price of the stock.
In-the-money options provide a buffer in case the underlying stock price drops during your trade.
But the more in-the-money you go, the higher the premium will be.
The best way to reduce that cost is to sell an out-of-the-money call against it.
Using a spread will provide you a better opportunity for success, but the trade-off will be the overall return.
For short-term option plays, you should look at stocks that have some momentum behind them.
As always, I encourage you not to bet all your money on a single investment.
Know your risk tolerance, abide by it, and pace yourself so that you have money to take part in future trades.
Tomorrow is always a new opportunity.
Bottom line: discipline and managing your profits is critical to success.
It isn’t as important as what you trade, stocks… options… bonds… commodities…
Each one of those instruments is different and it’s important to understand how to trade them.
I plan on releasing more videos for the masterclass to help you and the other members on becoming better moneymakers.
Success is the tide that lifts all boats.
That’s it for me today, be on the lookout for our next profit alert!
If you want your questions answered next week, make sure you email it in today at [email protected]