Dear Trader,
On the trading floor, if a trader had a bad December of trading, they'd joke that Christmas was cancelled.
Luckily, we closed out another winning trade this week.
But it’s December expiration today and we have several positions that will come off the board today.
Which is great, but it’s now a great way to close out the year.
The last few months have been sour.
We saw big winners quickly snap back and become losers.
It’s frustrating and losses do sting.
But it was exciting as hell when we closed out 9 winning trades in a row!
Most years are great and others are not so great.
I’ll review, make adjustments and get back on track and make up lost ground.
Now the CBOE Volatility Index (VIX), aka the “fear” index, closed at 21, which is 6 points above our key 15 area.
We haven’t seen volatility in December like this since 2018, when the market sank 20% because the Fed started to increase rates, before reverting back.
We’re still in a bull market, but we’re seeing a lot of uncertainty during a period of time we don’t.
Next week, the market is closed Friday and a short day on Thursday.
Today, these positions will expire.
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:
Buy-to-open the WMT Dec. 23, 2021, $146 call
Buy-to-open the F Dec. 31, 2021, $21.5 call
On Tuesday:
No action
On Wednesday:
Sell-to-close WMT Dec. 23, 2021, $146 call
On Thursday:
No action.
On Friday:
Buy-to-open the AAPL Dec. 23, 2021, $182.50 call
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.
WMT Dec. 23, 2021, $146 call
Outcome: 25% gain.
Notes: This position is a great example of why it’s important to scale in and out. It was a bumpy ride, but that approach would have captured a lot more of the gains than just buying and trying to sell the top at $2.09.
TROX Dec 17, 2021, $25/$30 call spread
Outcome: Expired worthless.
Notes: At one point we had a 20% gain on this spread. But this name was being kicked around as a takeover target and the activity we followed was looking for a bidding war and I was looking for it to pop higher.
CCJ Dec. 17, 2021, $30/$36 call spread
Outcome: Expired worthless.
Notes: We took a shot following the hot money, which was betting uranium prices would continue to soar higher.
MPC Dec. 17, 2021, $67/$70 call spread
Outcome: Expired worthless.
Notes: We took a shot and didn’t work out.
PFE Dec. 17, 2021, $50 put
Outcome: Expired worthless.
Notes: I completely read this wrong and forced this trade by going against the momentum.
Now it’s time to enjoy a fresh spicy margarita - TGIF!
Have a great weekend and talk with you on Monday.
To your wealth, freedom, and options!
Joshua M. Belanger