Fall is on the way, and the weather is cooling off…
And that seems to be the story with stocks on this pullback.
But don’t be concerned, because, despite the market weakness, we’re able to thrive in any market.
As you saw this week, you closed out a 200% and 50% real-money profits this week in TSM and MLCO.
Today is September options expiration and that means two 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. As we’ve seen, be prepared for a lot more dips ‘n rips that will create a lot of fast profit opportunities.
Despite what happens, we have the advantage of being nimble and thrive in any market.
By following the Hot Money, we can block the noise and focus on the next trade and get through this choppy market.
Let’s talk about the two positions expiring this week.
Two of our September expiring trades have fallen short of our profit targets.
- ANGI Homeservices Inc. (NASDAQ: ANGI) Sept. 18, 2020, $15 call (ANGI200918C00015000)
- Energy Transfer LP (NYSE: ET) Sept. 18, 2020, $6.50 call (ET200918C00006500)
Unfortunately, we don’t have more time for this position to play out.
Taking losses isn’t fun and can be painful. That is why position size is so important.
There’s nothing that you need to do, and they will be removed from your account by Monday morning.
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!)
- Buy-To-Open the Taiwan Semiconductor ADR (NYSE: TSM) Oct. 2, 2020, $85 call (TSM201002C00085000) up to $1.15 per contract or better, for the day.
- Buy-To-Open the Regions Financial Corp (NYSE: RF) Oct. 16, 2020, $12 call (RF201016C00012000) up to $0.65 per contract or better, for the day.
- Sell-To-Close the Taiwan Semiconductor ADR (NYSE: TSM) Oct. 2, 2020, $85 call (TSM201002C00085000) at the market.
- Sell-To-Close 50% of the Melco Resorts & Entertainment (NASDAQ: MLCO) Oct. 16, 2020, $20 call (MLCO201016C00020000) at the market.
Right now, our open positions are:
- Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000)
- Melco Resorts & Entertainment (NASDAQ: MLCO) Oct. 16, 2020, $20 call (MLCO201016C00020000) - 50%
- Regions Financial Corp (NYSE: RF) Oct. 16, 2020, $12 call (RF201016C00012000)
Now we wait and let the market come to us.
And I’ll be keeping you updated every step of the way.
Taiwan Semiconductor ADR (NYSE: TSM) Oct. 2, 2020, $85 call (TSM201002C00085000)
Date: Sept. 14, 2020
Reason: Our system triggered a buy signal after a $17 million New Money bet was placed, that would only profit if shares soared higher.
Outcome: 200% gain!
Notes: You executed this perfectly. Shares soared higher the following day sending the calls into triple-digit gains. But as we saw markets move fast and why it’s important to manage our profits. Greed is good, but gambling is foolish.
Melco Resorts & Entertainment (NASDAQ: MLCO) Oct. 16, 2020, $20 call (MLCO201016C00020000)
Date: Sept. 7, 2020
Reason: The New Money Monitor spotted a $15.5 million dollar whale trade, betting shares will soar higher.
Outcome: 50% gain on ½ of position.
Notes: You executed this perfectly. Markets move and we must manage our profits. You were able to lock in profits and let the rest ride since these contracts have time for more upside. Now, we don’t’ want to allow this to suffer total time decay, so I’m watching how it holds at these current levels.
ANGI Homeservices Inc. (NASDAQ: ANGI) Sept. 18, 2020, $15 call (ANGI200918C00015000)
Date: Aug. 24, 2020
Reason: Our system triggered a buy signal after a $13.3 million New Money bet, which would only profit if shares soared higher.
Outcome: Expired worthless.
Notes: This loss falls on my shoulders. These contracts decreased in price for a few days but then spiked back higher. Unfortunately, the floor dropped out the next day and that is where I should have pulled the plug and salvage the rest of the premium. After a large move lower like that, typically we see some relief, but the premium on those options deflated quickly. That is the great thing about options, sometimes we get caught flat-footed and know our full loss amount before order entry.
Energy Transfer LP (NYSE: ET) Sept. 18, 2020, $6.50 call (ET200918C00006500)
Date: Aug. 31, 2020
Reason: Our system triggered a buy signal after a $2.1 New Money bet, which would only profit if shares soared higher.
Outcome: Expired worthless.
Notes: We took our shot, but this didn’t play out as we anticipated. Energy has been lagging and I thought this activity was a signal that money could start to rotate into this sector. Sometimes New Money is wrong, and losses happen, but keep in mind, taking a 100% loss on a cheap option trade is often preferable than a smaller percentage loss on a stock trade. And the result – even a 100% loss – will have you better off than the equivalent stock trade. Another benefit of a conservative options strategy is that it leaves capital available to be more strategic.
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
P.S. The wedding went amazing!
Unfortunately, it rained early in the day and we couldn’t have the ceremony on the terrace at Trump in Chicago.
But we were still able to take some pictures outside.
This is my wife and I on LaSalle Street in front of the Chicago Board of Trade.