Update: Options Expiration Day - Here's What To Do

October 18, 2019

Earnings season kicked off this week and so far they've been more upbeat than expected.

Even still, it’s been a slow start to trading on October options expiration day.

All 11 major sectors are flat because of a lack of news.

Investor conviction has lacked in the face of economic growth concerns, political uncertainty and trade deal questions.

The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), continues to hang above our key level at 15 — which means that the market is still cautious.

The overall bias is that the S&P 500 will retouch all-time highs set in July. And yet we are still one tweet or headline away from prices zipping lower.

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 newest position this week.

Portfolio Update

On Tuesday, we bought to open Facebook, Inc. (NASDAQ: FB) November 1, 2019, $195 calls up to $3.65 per contract.

Today, our Toll Brothers Inc (NYSE: TOL) October 18, 2019, $41 calls and Barrick Gold Corp (NYSE: GOLD) October 18, 2019, $22 calls will expire worthless at today’s market close.

There’s nothing you need to do and this position will be removed from your account Monday morning.

Right now we’re holding:

  • Facebook, Inc. (NASDAQ: FB) November 1, 2019, $195 calls.
  • Cameco Corp (NYSE: CC) November 1, 2019, $9.50 calls.

After-Action Report

Toll Brothers Inc (NYSE: TOL) October 18, 2019, $41 calls

Date: September 17, 2019

Reason: Our Hot Money Tracker alerted us to a 1.9 million dollar bet in the October $41 call strike. Prices just broke out, and Hot Money was betting prices would continue to go higher.

Outcome: Expired worthless.

Improvements: It was a bumpy ride with the market swings over the last several weeks. Share prices continue to push into the same level, but we just don't have enough time for things to work out. We took our shot and it didn’t work out for us this time, but the next one will.

Barrick Gold Corp (NYSE: GOLD) October 18, 2019, $22 calls

Date: August 27, 2019

Reason: Hot Money was active in this sector for months hitting big win after big win as gold and silver prices were soaring. Hot Money was rolling up profitable positions into the October expiration with share prices at YTD highs.

Outcome: Expired worthless.

Improvements: The market swings had us playing on our heels, and when we’ve let something play out, it hasn’t worked in our favor. When we don’t, it does. It's frustrating, but it happens.

As always, keep sending your questions and feedback to [email protected]

My team and I will have a new trade for you on Tuesday.

To your wealth, freedom and options!

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%