Welcome to July!
What a wild first half to start in 2020.
Markets are open today, but it looks to be a snooze-fest, as most are starting to enjoy the holiday.
We're seeing broad markets trade sideways on this shortened week.
Markets are closed Friday in observation of Independence Day.
The major headline today is the ADP payroll report and the huge upward revision for May.
The ADP number showed a lot of hospitality and service industry jobs were added, which could continue to move the reopening progression.
The fear-mongering media has shifted the focus to highlight infection rates, but the death rate continues to decline.
Death rates declining is the most important number.
Volatility is still elevated with the fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is holding at 29.
Right now, we’re holding:
We are riding the path of least resistance right now, as there are a lot of upcoming catalysts that could to add momentum
That means markets will start buzzing again next week with fast profit opportunities.
Your Questions, Answered!
The mailbag is full, but with the shortened week I’m only going to cover one today.
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? -Mike N.”
That’s music to my ears.
I’m proud to hear that you’re motivated to take the next step in your journey!
I make training 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…
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.
With that said, I look forward to answering more next week.
If you want your questions answered next week, make sure you email it in today at [email protected]
Talk with you on Friday.