Happy Independence Day weekend!
The U.S. markets are closed today in observation of Independence Day tomorrow.
This week we kicked off the third quarter, which means earnings season is a few weeks away.
As we head into earnings season, I want to take the time to discuss one of the rules of being a New 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 the earnings season.
But New Money Trader’s don’t - we play to win with an edge, not gamble.
In the coming weeks, I’ll discuss more of our rules of being a New Money Trader.
The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), is at 26.
We’re seeing volatility come in, but it is still 2x the average.
So let’s stick to the plan and come out ahead.
- Buy-To-Open the ON Semiconductor Corp (NASDAQ: ON) July 17, 2020, $21 call (ON200717C00021000) up to $0.75 per contract or better, for the day.
- Buy-To-Open the Vale S.A. ADR (NYSE: VALE) Aug. 21, 2020, $12 call (VALE200821C00012000) up to $0.20 per contract or better, for the day.
Right now, we’re holding these positions - waiting to closeout for more gains:
- Novo Nordisk A/S ADR (NYSE: NVO) July 17, 2020, $72.50 call (NVO200717C00072500)
- GOODYEAR Tire & Rubber Co. (NASDAQ: GT) July 17, 2020, $5 put (GT200717P00005000)
- ON Semiconductor Corp (NASDAQ: ON) July 17, 2020, $21 call (ON200717C00021000)
- Vale S.A. ADR (NYSE: VALE) Aug. 21, 2020, $12 call (VALE200821C00012000)
I’m looking forward to answering your most pressing questions this Wednesday.
If you want yours included, send yours now to [email protected].
Have a great 3-day weekend and I’ll have a new trade for you on Monday.
To your wealth, freedom, and options!