Dear Trader,
This was another slow week and the markets feel heavy.
What I mean is that we're setting up to see more of a pullback.
That's because I haven't seen longer-term positioning in the options market.
When we see lack of upside speculation, it’s an indication of lack of appetite for risk.
That can change next week, but we'll continue to follow the system.
We do have several positions that expire today.
The good news is that these are off our screens
Even with today’s expiring positions we continue to have a hot hand.
Now, the CBOE Volatility Index (VIX), aka the “fear” index, is at 18.45 above our key 15 level.
That means we're still in a bull market, but uncertainty is picking up.
Now let’s talk shop.
Today, this position will expire.
Unfortunately, we don’t have more time for this to play out.
There’s nothing that you need to do, and they will be removed from your account over the weekend.
Taking losses isn’t fun, but without the bitter, the sweet isn’t as sweet.
But remember…
The sweet part is making money and losses are part of the process.
Here’s a recap of what we did this week.
On Monday:
Buy-to-open VIAC July 30, 2021, $44/$47 call spread
On Tuesday:
Sell-to-close the KO July 30, 2021, $54.50/$56.50 call spread
On Wednesday:
Buy-to-open the MGM July 30, 2021, $39.50/$37.50 put spread
On Thursday:
No action
On Friday:
Sell-to-close the MGM July 30, 2021, $39.50/$37.50 put spread
Right now, we’re holding:
This is my journal which is a debrief of every trade closed or expired to analyze what happened, why it happened and how it can be done better — like what the military uses after missions.
MGM July 30, 2021, $39.50/$37.50 put spread
Outcome: 79% gain.
Notes: We executed this perfectly for this position.
KO July 30, 2021, $54.50/$56.50 call spread
Outcome: 63% gain.
Notes: It can be frustrating to see a stock rip the following day after we sell, but we executed this perfectly. We just didn’t have any luck on our side.
VIPS July 16, 2021, $24/$28 call spread
Outcome: Expired worthless.
Notes: We took our shot and this didn’t work out.
LUMN July 16, 2021, $16 call
Outcome: Expired worthless.
Notes: We took our shot and this didn’t work out.
F July 16, 2021, $15.50/$16.50 call spread
Outcome: Expired worthless.
Notes: We took our shot and this didn’t work out.
AMD July 16, 2021, $96/$100 call spread
Outcome: Expired worthless.
Notes: We took our shot and this didn’t work out.
Now it’s time to head to the pool with a fresh jalapeno margarita - TGIF!
To your wealth, freedom, and options!
Joshua M. Belanger