For me, this was not a very good week, in fact it was quite bad.
From Tuesday to Thursday the DOW was down almost 400 points. After the 4th 0f July weekend the NASDAQ was up 3 of 4 days.
My holdings are Tech heavy. Even with the NASDAQ up my account was down about 25 grand from Tuesday to Thursday. Then, along came Friday. The DOW was up 447, the NASDAQ up 142 and the S&P up 48. With this fantastic day my account only recovered $2000. Not only that but all of my positions are below my buy-in price and I was not assigned on 1 position. Like I said, this was a bad week. I hope you had a better one.
I only had 3 Grasshopper positions expire. None were assigned but I brought in $380. Not very much but it is about a 2% return. Even though my account was down on the week I was able to lock in $8080 in premiums.
I believe sometime soon all my positions will recover. My account will be back up because of the stock moving up and I’ll also have all the premiums I’ve been bringing in. I feel my account will look great before the end of the year. As long as I can take monthly money as a salary, which I’ve been doing, I’m happy. At this point in my life I’m more in this for income and not growth. If you’re a little younger and have a full time job, maybe your motive is growth, and it should be. Once you’re a little older your account will be larger then you can concentrate on an income. Right now get your account to a sizable amount. A larger account and a lot of experience is a great combination.
Here are the 3 trades that expired in “The Grasshopper Field” this week.
U.S. Steel
I didn’t get to report this trade but on Friday I sold 200 shares of X for a small profit. I was just freeing up money.
If I grabbed a small profit I didn’t lose money!
6/17/21 – Buy 200 Shares X @ $23.82
7/9/21 – Sell 200 Shares X @ $23.92
Profit +$20
MOMO
MOMO hasn’t been moving much. Hopefully I’ll get assigned soon. This was a few week trade that gave me a 2.3% return. If I can keep bringing in premiums my money is working. MOMO has been slow and steady. Possibly a little slower than I want lol.
6/22/21 – Sell to Open 4 MOMO 7/9/21 $15.50 C @ 35¢ (+$140)
7/9/21 – Expired 4 MOMO 7/9/21 $15.50 C
Profit +$140
3D Systems
DDD has been moving nicely but put the brakes on. This 3 day trade gave me a 2.9% return.
7/6/21 – Sell to Open 2 DDD 7/9/21 $37.50 C @ $1.10 (+$220)
7/9/21 – Expired 2 DDD 7/9/21 $37.50 C
Profit +$220
Total Weekly Gain $380
I never try to have anyone adapt to my philosophy and strategy. I just try to teach how options work and show how successful you can be with examples. You must develop your own strategy according to your account size and risk tolerance. However, I hope you can understand why my philosophy is to have a strategy to get assigned when doing Covered Calls. If you don’t get assigned all hell can break out. I’m an options trader! If you’re a buy and hold investor, maybe you don’t want to lose your stock. Options are a great way to bring in extra cash even when you want to hold onto your stock. You just have to be careful to pick the right Strike Price and Expiration Date not to get assigned to accomplish your goal. It doesn’t matter what your strategy is. The bottom line is, know how options work and use them to bring in money. Following my trades will help you understand how options work; Implied Volatility (IV), Time Decay, Time Value, Intrinsic Value are all very important to understand. Keep studying and you will do great!
Before you join any news letter or subscription based service, make sure you Google for their scam alert. While we are all trying to survive in this game they want your money. They want to take your money while your account is going down from their bad picks while their account gets bigger. Not from good picks but from your subscription fees. One I would recommend reading is a guy named Travis Johnson. He has a letter called “The Stock Gumshoe.” It’s inexpensive and he is very good at finding the scams and figuring out the stocks in teaser ads. You can read him for free but there are advantages to paying the small fee. I do because he proved to be very honest. I’m thinking about dedicating a page to him in Main Street beats Wall Street. That’s how much I like him.
Have a great weekend!
Successful trading,
Steve
The Options Coach