I apologize for being late with this week’s week ending report, been crazy busy! This week was nothing like the past 5 or 6 weeks but I was in the plus column. I only had 1 trade come to an end. Let’s take a look at the trade then I want to mention a few more things on my mind. The 1 trade involved Twitter (TWTR).
I own 1000 shares of TWTR since 7/30/19 and have been selling Calls without being assigned. Last Friday, 8/2, I had a Call that was expiring at the end of the day. This was a Call attached to a Covered Call. Late in the day, knowing I wasn’t gonna be assigned, I sold another Call to start the trades for the following week. This Call was to expire on this past Friday, 8/9. On Monday, 8/5, TWTR and the market had a down day. With TWTR down I decided to do a “Buy to Close” to get out of the Call. I sold the Call for a premium of $900 and I was able to “Buy to Close” for $300 with a $600 profit. I could have just held on until the end of the week and kept the entire premium of $900 but I was hoping the stock would bounce back and I would get another Calls sold to expire the same Expiration Date, 8/9. The stock never bounced back and I still haven’t sold another Call against my TWTR shares.
8/2/19 – Sell to Open 10 TWTR 8/9/19 $43.00 C @ 90¢ (+$900)
8/5/19 – Buy to Close 10 TWTR 8/9/19 $43.00 C @ ¢30 (-$300)
Profit +$600
This was the only trade I made for the week so my Total weekly gain was $600.
Total Weekly Gain +$600
I don’t know how anyone else in doing, but this market the last week or 2, I don’t like! My point is this market will curtail my trading a bit. I am a swing trader! I feel trying to swing trade in this market at the present time is too much guess work. I don’t want to trade with all the guess work. I feel it adds too much risk (and gambling).
Today was a great example of what I’m talking about. The market moved 300 points before I could even look to see what I want to do. We all know news moves the market, but now it seems that it’s tweets that moves the market. The volatility is off the charts! Options can be dangerous enough. It seems to me that if you’re not monitoring Trump’s Twitter account you will be behind the curve and too late to enter a good opportunity. Wall Street is on top of these tweets and making trades before we know what’s happening. These tweets are triggering computer trading. You cannot compete with that! I think it’s important to follow smart money but we should not be the tail of the dog being dragged all over; entering trades when the big boys are getting out.
I will be trading but I’m trying to be very carful. I will stick to my “Slow and Steady, Steady and Slow” attitude. It’s times like this to be carful and maybe I’ll have to be satisfied with $hundreds a week instead of $thousands. Hopefully things will settle down to the point where I feel comfortable with more trading. I suggest you do the same!
Also, some of my stock holding are below where I bought. When this happens it’s hard to get Covered Calls sold. Even though Naked Calls are my favorite strategy, I will not attempt this strategy now. My stock are slowly coming back and hopefully I’ll be back in the game with the selling of Calls soon.
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Any question, send me an email.
Steve
The Options Coach