We continue to see knee-jerk moves in the markets.
One day it's buying the dip and the next it's selling the rip.
This is what we call a choppy market — and makes it challenging for all market participants.
We've seen this before, and we will see it again.
Volatility creates opportunity, but emotional traders stand to get burned in the short term.
That's because it’s easy to get spun around and get angry.
The key is to not get frustrated, make rash decisions and keep going through the motions.
The red on the screen is part of the process, but remember, over the long run, we must let the system play out.
Now, The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 18.
This is an interesting drop in the VIX, because we’ve seen that 20 has been on the floor for many months.
This is notable because the NASDAQ 100 has been the leader for many years, but the S&P 500 and Russell 2000 are outperforming.
Now let’s talk shop.
Here’s a recap of what we did this week.
Buy-To-Open the Lumen Technologies, Inc. (NYSE: LUMN) April 16, 2021, $15 call (LUMN210416C00015000) up to $0.38 per contract or better, for the day.
Buy-To-Open the Foot Locker Inc (NYSE: FL) April 16, 2021, $60 call (FL210416C00060000) up to $0.75 per contract or better, for the day.
Sell-To-Close the Foot Locker Inc (NYSE: FL) April 16, 2021, $60 call (FL210416C00060000) at the market.
Right now, we’re holding:
- Schlumberger Limited (NYSE: SLB) June 18, 2021, $40 call (SLB210618C00040000)
- Cameco Corp (NYSE: CCJ) April 16, 2021, $22 call (CCJ210319C00022000)
- International Game Tech (NYSE: IGT) April 16, 2021, $21 call (IGT210416C00021000)
- Lumen Technologies, Inc. (NYSE: LUMN) April 16, 2021, $15 call (LUMN210416C00015000)
These are far more in the red then anticipated and now baby sitting losers, which is what we want to avoid.
Right now, I’ll be looking to unload these into a move higher, which will likely still be losing trades.
We do have time, but we’ve also lost time and volatility.
This is our debriefing 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.
Foot Locker Inc (NYSE: FL) April 16, 2021, $60 call (FL210416C00060000)
Date: March 25, 2021
Reason: Our monitor triggered a buy alert when a Hot Money bought $120,000 of the April 16, 2021, $60 call. This was an 300% increase in volume at that strike, which the trader was looking to make a quick return.
Outcome: 30% gain.
Notes: We executed this perfectly. We followed the system and sold when it hit our target. It looks like that Hot Money is still looking for more upside, which could happen. For those that want to take more risk, they could sell 50% and hold onto rest. But, I like to move on to the next opportunity.
Once that closing bell rings, it’s margarita by the pool time.
I'll have a new trade on Monday, and have a great weekend.
To your wealth, freedom, and options!
Joshua M. Belanger