October Expiration - Here Are Your Details Inside

October 16, 2020

The weather here in Chicago has cooled off, but stocks are heating up!

Earnings have kicked off, and election volatility will create even more opportunities by the second.

I’m excited because if these next several weeks are like what I saw in 2016, we’re going to be stacking bigger gains, quickly!

Today is October options expiration and that means three of our options positions will expire today.

There’s nothing you need to do, but I will address those in a few minutes.

Now, the fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is at 26. That means volatility continues to be 200% higher than the usual.

But don’t be concerned, because, despite the volatility, we’re able to thrive in any market.

We’ll look for trades to play both sides of the market as we did this week and profit!

Let’s talk about the two positions expiring this week.

Portfolio Update

Three of our October expiring trades have fallen short of our profit targets.

  • Snap Inc. (NYSE: SNAP) Oct. 16, 2020, $29 call (SNAP201016C00029000)
  • Melco Resorts & Entertainment (NASDAQ: MLCO) Oct. 16, 2020, $20 call (MLCO201016C00020000) - 50%
  • Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000)

Unfortunately, we don’t have more time for this position to play out.

There’s nothing that you need to do, and they will be removed from your account by Monday morning.

Taking losses isn’t fun and can be painful, 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.

Our limited risk options allow us to trade profit opportunities with greater flexibility — and much higher potential gains than buying stocks outright.

And we’ll have a brand-new batch of trades coming in a few weeks for another shot at quick profits. (So, stay tuned!)

On Monday:

  • Buy-To-Open the Suncor Energy Inc. (NYSE: SU) Oct. 23, 2020, $12.50 put (SU201023C00012500) up to $0.35 per contract or better, for the day.

On Wednesday:

  • Sell-To-Close the Suncor Energy Inc. (NYSE: SU) Oct. 23, 2020, $12.50 put (SU201023C00012500) at the market.

Right now, we’re holding:

  • Vonage HLDGS Corp. (NASDAQ: VG) Dec. 18, 2020, $11 call (VG201218C00011000)

Now we wait and let the market come to us.

Patience and persistence are key, and I’ll be keeping you updated every step of the way.

After-Action Report

Suncor Energy Inc. (NYSE: SU) Oct. 23, 2020, $12.50 put (SU201023C00012500)

Date: Oct. 12, 2020

Reason: Our system triggered a bearish signal triggered after a $2.3 million Hot Money bet. This was a 4,732% increase in put option contracts that would only profit in shares sunk lower.

Outcome: 14% gain.

Notes: Second-guessing yourself is the struggle every trader goes through. In hindsight, I sent you the sell alert too early because prices did drop lower the next day. Some traders have mentioned they were able to lock in 100% gains the next day. I thought we would see more weakness in the stock as the broad market pulled back. With time ticking away, we exited the position into strength and locked in our gains. At the end of the day, putting wins on the board is what’s important; the profits will follow.

Snap Inc. (NYSE: SNAP) Oct. 16, 2020, $29 call (SNAP201016C00029000)

Date: Oct. 05, 2020

Reason: Our system triggered a bullish signal after a $17 million Hot Money bet. This activity is part of a profitable position that a trader rolled up into a higher strike. They did this because they were looking to lock in gains and profit on a continued move higher.

Outcome: Expired worthless.

Notes: We took our shot, but this didn’t play out as I anticipated. We’ve had some wins in this stock and we’ve had some losers. The bad guys got on this one, but we’ll get them on the next.

Melco Resorts & Entertainment (NASDAQ: MLCO) Oct. 16, 2020, $20 call (MLCO201016C00020000) - 50%

Sept. 7, 2020

Reason: The Hot Money Monitor spotted a $15.5 million dollar whale trade; betting shares will soar higher.

Outcome: 50% gain on ½ of position and the ½ expired worthless.

Notes: This is a double-edged sword. Initially, you managed your position by selling ½ of the position for a 50% gain. I’m often asked why we don’t take profits and let the rest ride. This is a good example of why I prefer to take full profit and move onto a new trade. Unfortunately, shares quickly sunk lower and never recovered. The capital tied up in this name could’ve been deployed towards a better opportunity. I prefer consistency and stacking wins.

Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000)

July 13, 2020

Reason: The Hot Money Monitor spotted a $7.5 million dollar whale trade, betting shares will soar higher.

Outcome: Expired worthless.

Notes: This loss falls on my shoulders. We had time for this position to play out into the fall and election. I also saw this as a hedge if we saw more lockdowns going into October. I should’ve cut this loose back in August, but I was caught flat-footed. I must be better and that’s my promise to you.

I’m looking forward to answering your most pressing questions this Wednesday.

If you want yours included, send it to [email protected]

Have a great weekend, and I’ll have a new trade for 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%
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