Results Week Ending 2/26/21

I’m going to talk a little more about not over investing, and always having money on the sidelines. Especially when working on margin. Even at the risk of being redundant, it’s that important to manage your funds. I believe it’s just as important to manage your cash as it is your positions. Your cash, your sideline money, your available funds, your margin buying power; whatever you want to call it, it must be managed.

In recent weeks I’ve been writing about cutting down on my weekly profits. I had an amazing first 6 weeks of 2021. Just look at the “Trade History 2021” weekly gains. They’re nothing short of amazing! I averaged well over 30K per week. And believe it or not I wasn’t even fully invested. As a result of 2020 my account grew to a sizable amount.

After this crazy start I decided to pull in the reins a bit. I didn’t want these fantastic weeks to get me away from my strategy, and I wanted more money on the sidelines. Basically I felt a little market correct coming. And believe me, these last few market sell-off weeks is not the big correct I feel we might get. The loyal readers know I’ve been getting into positions with Strike prices to better my chances of assignment. Recently I was assigned on some pretty big positions including Peloton and Tesla. Last week I was assigned on 5 positions. More than before, I wanted assignments to get more money on the sidelines.

So, how has this been working? The last few weeks have been quite bad for the market, especially the NASDAQ. The money I stacked on the sidelines helped me immensely. Remember, I still own 7000 shares of Palantir, along with a ton of other stocks with 1000 share positions. I would have loved to have been assigned on all of them but it didn’t work that way. Some of these positions went so low that it almost wiped out my first 6 weeks of trading. Luckily I had enough money on the sidelines to prevent a margin call, plus I had enough to get into trades to continue to bring in my weekly profit goal of $10,000.

This is a great learning experience for all readers to teach the importance of managing both your positions and your cash not invested.

Another lesson is the importance of picking the correct stocks to trade with. Like I said, much of my profits of 2021 are not in my account right now. But, I believe I own really good stocks. Markets don’t only move up! All stocks fluctuate. If you cannot handle, or don’t have the stomach for the market volatility, you must make smaller trades until it develops. Notice I didn’t say, you must find another business! I said, you must develop the tolerance for market swings. This is all part of being a trader. Once you develop this tough skin you will know that stocks recover. Plus, you will make less “emotional trades” and you will become a better trader.

When my stock positions recover, and are added to my weekly gains my account will look great again.

I hope all this makes sense because I feel it’s very important.

I had another week of many trades. As some big name stocks hit, what I felt was a good buy-in price, I sold Puts. As you look at the trades I made, notice the Puts. I sold Puts on 5 stocks. I was only assigned on 1. This means I had this stock put to me. It was a 10 contract $64 Put with NTAP. The stock closed at $62.60 and it was put to me at $64. This does not upset me, I love this stock and I think it will do well this week. Now that I own 1000 shares I’ll be selling Calls this week.

Let’s take a look at my trades:

Occidental Petroleum

On 6/9/20 I bought 2 LEAPS. I sold that for a $500 profit. Doesn’t sound like much but it’s a return of 29.4%.

6/9/20 – Buy to Open 2 OXY 1/21/22 $20.00 C @ $8.50

2/22/21 – Sell to Close 2 OXY 1/21/22 $20.00 C @ $11.00

Profit +$500

Xpeng

I sold a 10 contract Call with XPEV. I was not assigned. I’m disappointed in this stock but I think it will recover.

2/18/21 – Sell to Open 10 XPEV 2/26/21 $47.00 C @ 65¢ (+$650)

2/26/21 – Expired 10 XPEV 2/26/21 $47.00 C

Profit +$650

SLV

This is another position I’m disappointed in. This is a silver ETF. I feel as Biden continues to spend money the government doesn’t have silver will go up. This was a Covered Call without assignment.

2/16/21 – Sell to Open 5 SLV 2/26/21 $27.00 C @ 30¢ (+$150)

2/26/21 – Expired 5 SLV 2/26/21 $27.00 C

Profit +$150

Draftkings

This was a 4 day Covered Call without assignment. Nice premium!

2/22/21 – Sell to Open 10 DKNG 2/26/21 $64.00 C @ $2.00 (+$2000)

2/26/21 – Expired 10 DKNG 2/26/21 $64.00 C

Profit +$2000

Cree

Covered Call without assignment.

2/23/21- Sell to Open 10 CREE 2/26/21 $122.00 C @ $1.00 (+$1000)

2/26/21 – Expired 10 CREE 2/26/21 $122.00 C

Profit +$1000

Workhorse

I sold a Call on Expiration Day for the $200 premium.

2/26/21 – Sell to Open 10 WKHS 2/26/21 $17.00 C @ 20¢ (+$200)

2/26/21 – Expired 10 WKHS 2/26/21 $17.00 C

Profit +$200

Peloton

Covered Call without assignment.

2/23/21 – Sell to Open 20 PTON 2/26/21 $33.00 C @ 50¢ (+$1000)

2/26/21 – Expired 20 PTON 2/26/21 $33.00 C

Profit -$1000

Advanced Micro Devices

My 1st Put. I felt this stock wouldn’t get down to $79 so I sold a Put for an $800 premium. It never hit $79!

2/23/21 – Sell to Open 10 AMD 2/26/21 $79.00 P @ $.80 (+$800)

2/26/21 – Expired 10 AMD 2/26/21 $79.00 P

Profit +$800

Square

I didn’t think SQ would get down to $222.50 with this Put. It didn’t!

2/23/21 – Sell to Open 5 SQ 2/26/21 $222.50 P @ $3.00 (+$1500)

2/26/21 – Expired 5 SQ 2/26/21 $222.50 P

Profit +$1500

Netapp

The stock fell a little after earnings. I was assigned on this $64 Put. I’ll sell a Call on Monday.

2/23/21 – Sell to Open 10 NTAP 2/26/21 $64.00 P @ $.75 (+$750)

2/26/21 – Expired 10 NTAP 2/26/21 $64.00 P

 Profit +$750

Workhorse

Workhorse took a big dip after not getting a government. After the dip I sold a $13 Put. I felt confident it wouldn’t go lower.

2/24/21 – Sell to Open 10 WKHS 2/26/21 $13.00 P @ 95¢ (+$950)

2/26/21 – Expired 10 WKHS 2/26/21 $13.00 P

 Profit +$950

Workhorse

As time went by I sold another WKHS Put. Also not assigned.

2/25/21 – Sell to Open 10 WKHS 2/26/21$13.00 P @ 22¢ (+$220)

2/26/21 – Expired 10 WKHS 2/26/21 $13.00 P

Profit +$220

SLV

Grasshopper trade, same as above.

2/26/21 – Sell to Open 1 SLV 2/26/21 $27.00 C @ 30¢ (+$30)

2/26/21 – Expired 1 SLV 2/26/21 $27.00 C

Profit +$30

Workhorse

Grasshopper trade. A Covered Call with assignment.

2/25/21 – Buy 100 Shares WKHS @ $15.50

2/26/21 – Assigned 100 Shares WKHS @ $16.00

Profit +$50

 

2/25/21 – Sell to Open 1 WKHS 2/26/21 $16.00 C @ .55 (+$55)

2/26/21 – Expired 1 WKHS 2/26/21 $16.00 C

Profit +$55

Total Weekly Gain +$9855

I’m very happy with this week. I was able to keep money on the sidelines, no margin call and make my weekly goal. However, I was a little short of $10,000.

Watch for the Grasshopper Report.

Successful trading,

Steve

The Options Coach