No. 1 Rule as We Continue Through Earnings Season

February 12, 2021

Stocks continue to defy gravity and hit new all-time highs.

Today’s push higher in the market allowed us to close the week out with our head high with a fast overnight triple-digit profit opportunity with our SOHU calls.

The bulls are in charge, but as we’ve seen before, markets can turn on a dime.

It was a busy week of earnings releases and that will continue the next two weeks. 

As we continue through earnings season, I want to take the time to discuss one of the rules of being a Hot Money Trader:

We always exit a position the day of its earnings announcement — for a gain or loss.


There isn’t an edge to holding options through an earnings event.

You see, most of the time the options market has already priced in the expected move.  Even if stock prices go in our desired direction, we still lose. The move was already baked into the options price.

Novice investors and traders gamble trading options during earnings season. Hot Money Trader doesn’t.

We play to win with an edge, not gamble.

For instance, if you look at shares of AXL, they are down by 7% after its earnings release.

We exited that position last week for a profit.

If we held onto that position, we would’ve been looking at a loser.

That’s why It’s important that we stick the system and ignore the noise.

In the coming weeks, I’ll discuss more of our rules of being a Hot Money Trader.

Now, The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 20.

As I mentioned yesterday, each time the VIX has pushed into this level, markets have pulled back.

Now let’s talk shop.

Portfolio Update

On Monday:

Buy-to-open the Flex Ltd. (NASDAQ: FLEX) Feb. 19, 2021, $20 call (FLEX210219C00020000) up to $0.60 per contract or better, for the day.

On Wednesday:

We sat on our hands and waited for better signals.

On Thursday:

Buy-to-open the ProShares UltraPro Short Dow30 (NYSE: SDOW) Feb. 12, 2021, $12 call (SDOW210219C00012000) up to $0.25 per contract or better, for the day.

Buy-to-open the SOHU COM LTD ADR (NASDAQ: SOHU) March 19, 2021, $22.50 call (SOHU210319C00022500) up to $1.00 per contract or better, for the day.

On Friday:

Sell-to-close the SOHU COM LTD ADR (NASDAQ: SOHU) March 19, 2021, $22.50 call (SOHU210319C00022500) at the market.

Right now, we’re holding:

  • América Móvil, S.A.B. de C.V.  (NYSE: AMX) February 19, 2021, $16 call (AMX210219C00016000)

  • GOGO Inc. (NASDAQ: GOGO) March 19, 2021, $20 call (GOGO210319C00020000)

  • Kroger Co. (NYSE: KR) March 19, 2021, $38 call (KR210319C00038000)

  •  ProShares UltraPro Short Dow30 (NYSE: SDOW) Feb. 12, 2021, $12 call (SDOW210219C00012000)

  • Flex Ltd. (NASDAQ: FLEX) Feb. 19, 2021, $20 call (FLEX210219C00020000)

After-Action Report

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.

SOHU COM LTD ADR (NASDAQ: SOHU) March 19, 2021, $22.50 call (SOHU210319C00022500).

Date: February 11, 2021

Reason: Our system triggered a buy alert after bullish call buying positioned a new $1 million Hot Money bet that shares will pop higher in the coming week, which was a 300% surge in new call options opened.

Outcome: Our 100% profit was triggered.

Notes: We traded this the right way. We followed the signal and then sold into the profit peak. The speed of the which we’ve seen our profit peaks have been coming very quickly. Fast profit opportunities are great, but we must be prepared to execute quickly.

The stock market is closed on Monday.

Have a great 3-day weekend, and I’ll have a new trade for you on Tuesday.

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%