Mixed Signals on November Options Expiration

November 19, 2021

Dear Trader

It felt like a long week with tight back-and-forth price action.

We tend to see markets drift higher the week on monthly options expiration, which is exactly what happened this options expiration week.

We’re clearing the rest of the earnings log which has been lackluster. 

Stocks keep drifting higher, but the economy looks like it’s on thin ice.

Then you have congress ramming another several trillion dollar spending bill, which the grandchildren or our grandchildren will be on the hook for.  

As I have to remind myself, it doesn’t matter until it matters.

Now the CBOE Volatility Index (VIX), aka the “fear” index, closed at 18, which is one point above our key 15 level.

Even though the path of least resistance is higher, the uptick in volatility from last week is something to keep an eye on.

Next week, the market is closed Thursday and a short day on Friday. 

Now let’s talk shop.

Portfolio Update

Today, this position will expire.

F Nov. 19, 2021, $20.50/23 call spread

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 the TSLA Nov. 19, 2021, $1030/$1060 call spread

On Tuesday:

Sell-to-close the TSLA Nov. 19, 2021, $1030/$1060 call spread

On Wednesday:

No action.

On Thursday:

No action.

On Friday:

Buy-to-open the NVDA Nov. 26, 2021, $330/$350 call spread

Right now, we’re holding:

  • TROX December 17, 2021, $25/$30 call spread
  • CCJ Dec. 17, 2021, $30/$36 call spread
  • LVS Nov. 26, 2021, $41/$115 call spread
  • KO Dec. 3, 2021, $58 call
  • NVDA Nov. 26, 2021, $330/$350 call spread

Trade Journal

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.

TSLA Nov. 19, 2021, $1030/$1060 call spread

Outcome: 100% gain.

Notes: Having a short-term memory is critical in the market. It would have been great to have back to back wins. We were able to rebound from last week's TSLA debacle and put a winner on the board and executed as we should’ve. 

F Nov. 19, 2021, $20.50/23 call spread

Outcome: Expired worthless.

Notes: These are some stocks that just beat you every time, which Ford is one of them.  For seven days this stock defied gravity and then we got into and pulled back. 

Now it’s time to enjoy a fresh spicy margarita - TGIF! 

Have a great weekend and talk with you on Monday.

To your wealth, freedom, and options!

Joshua M. Belanger

Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%