Today is May monthly options expiration...
...And we have a position that expires today.
The back-and-forth market action continues, but we were able to put two winners on the board.
We’re nearing the last week of May, which we will likely continue to see choppy market action.
Despite many looking forward to the 3-day weekend next week, volatility is elevated.
Inflation and money printing will continue to be a theme into the summer months.
The CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 20.
That means the market bias is still higher, but concerned of a sharp sell-off.
Now let’s talk shop.
Despite closing two winning trades last week, we have a position expiring today.
Today, this position will expire.
- NRG Energy, Inc. (NYSE: NRG) May 21, 2021, $40 call (NRG210521C00040000)
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.
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, keep your head up and focused!)
Buy-to-open RLX Technology Inc. (RLX) June 18, 2021, $15/$17.50 call spread
Sell-to-close Surface Oncology, Inc. (SURF) June 18, 2021, $12.50/$15 call spread
Sell-to-close the E2open Parent Holdings, Inc. (NYSE: ETWO) June 18, 2021, $12.50 call (ETWO210618C00012500)
Buy-to-open International Paper Company (IP) July 16, 2021, $65/$67.50 call spread
Right now, we’re holding:
- Schlumberger Limited (NYSE: SLB) June 18, 2021, $40 call (SLB210618C00040000)
- Under Armour, Inc. (UA) May 28, 2021, $19.50 Call (UA280514C00019500)
- International Paper Company (IP) July 16, 2021, $65/$67.50 call spread
- RLX Technology Inc. (RLX) June 18, 2021, $15/$17.50 call spread
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.
E2open Parent Holdings, Inc. (NYSE: ETWO) June 18, 2021, $12.50 call (ETWO210618C00012500)
Date: April 28, 2021
Outcome: Closed for a 50% gain.
Notes: It looks like I had a little luck with this position. I didn’t notice that earnings were this week, but prices gapped higher. Even after that move and trying to exit at 70 cents, my order wasn’t filled. Luckily, prices popped the following day and I was able to exit for a 50% gain. It’s not the ideal execution, but I’ll take it.
Surface Oncology, Inc. (SURF) June 18, 2021, $12.50/$15 call spread
Date: May 14, 2021
Outcome: Closed for a 50% gain.
Notes: This was a great setup, followed by execution.
NRG Energy, Inc. (NYSE: NRG) May 21, 2021, $40 call (NRG210521C00040000)
Date: April 07, 2021
Outcome: Expired worthless.
Notes: These are the ones that are a drag. This position popped higher, but short of my profit target and then the floor dropped out from under it. Instead of taking the loss at 60 cents, I slowly watched it decay to zero. The goal is to improve everyday and obviously there’s room for that after this.
That’s all for today.
Now it’s time to head to the pool with a fresh jalapeno margarita - TGIF!
I'll have a new trade on Monday and have a great weekend.
To your wealth, freedom, and options!
Joshua M. Belanger