Dear Trader,
After a slow start to the week…
...Stocks shifted gears and hit the gas higher.
Our patience paid off as we closed out 4 winning trades this week.
Speaking of gas, the energy sector continues to be hot and provided us with 4 winning trades last month.
And I continue to see money flow into this sector for a continued move into November.
Even though prices have seen a massive move higher the last few weeks, commodities don’t trade the same as equities.
So that means we could see prices continue to go higher before a meaningful shakeout.
The VIX got body slammed this week.
The CBOE Volatility Index (VIX), aka the “fear” index is at 16 and back toward mid-August levels.
It is above the key level of 15, but last week's reading was 20.
Bitcoin above $60K, knocking on the door of $65K isn’t getting too much attention.
This move comes after the SEC announced it’s not going to stop Bitcoin futures ETFs from hitting the market.
While we did close out 4 winning trades... we also have one that expired worthless today.
Now let’s talk shop.
Today, this position will expire.
AAPL October 15, 2021, $150/$155 call spread
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.
But remember…
The sweet part is making money and losses are part of the process.
Here’s a recap of what we did this week.
On Monday:
Sell-to-close the OXY October 29, 2021, $31/$35 call spread
Buy-to-open the SLB October 29, 2021, $34/$36 call spread
On Tuesday:
Sell-to-close the MGM October 29, 2021, $45/$48 call spread
On Wednesday:
No action.
On Thursday:
No action.
On Friday:
Sell-to-close the YELL October 15, 2021, $7.50 call
Sell-to-close the SLB October 29, 2021, $34/$36 call spread
Right now, we’re holding:
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.
AAPL October 15, 2021, $150/$155 call spread
Outcome: Expired worthless.
Notes: We took a shot, but got caught in the tech selloff. That’s the good of using options with limited risk.
YELL October 15, 2021, $7.50/$10 call spread
Outcome: 16% gain.
Notes: We closed out the $7.50 and the $10 call expired. This one took patience as we held through a pullback and then buyers stepped in. This was on the dance floor coming into expiration weeks, but would’ve liked to have seen today’s move happen before today for a bigger gain.
MGM October 29, 2021, $45/$48 call spread
Outcome: 86% gain.
Notes: A perfect execution.
OXY October 29, 2021, $31/$35 call spread
Outcome: 112% gain.
Notes: A perfect execution.
SLB October 29, 2021, $34/$36 call spread
Outcome: 75% gain.
Notes: A perfect execution.
Now it’s time to get my 7 mile run in before I head to the pool with a fresh jalapeno margarita - TGIF!
Have a great weekend and talk with you on Monday.
To your wealth, freedom, and options!