Let me start by saying I hope everyone is staying safe. Try to stay in your home and quarantined. It’s not fun being locked up, not enjoying the great outdoors, but it must be done. You can still enjoy the outdoors but stay away from people. The virus numbers continue to grow so I’m doing my part. The hospitals are getting overwhelmed. Try not to become a statistic and take a hospital bed. I live in NYC which is a hotspot right now. I’m staying on my property trying to stay healthy. Remember, health is wealth!
My daughter lives about an hour from me. I miss her, her husband and the grandkids, but I think it’s better to quarantine right now to keep everyone safe. Until the numbers start to go down.
My son, I’m a little worried about. He’s a NYC Firefighter. He’s out there! I told him to keep his body strong. Eat healthy, no drinking, and exercise. He’s constantly out on emergency runs and he’s with other firefighters in the house. The chance of exposure is much higher for him. If he keeps his body strong, if exposed, he might be able to fight it off. He’s young enough.
Let’s get into the market. I just had the biggest week of bringing in premiums since I started Main Street beats Wall Street. Even with this great week my account is way below where it started on the 1st of the year.
The market started the big drop around 2/24. Along with the entire world, my account took a big hit. The first week and a half I got crushed. I went down 30%. The last week and a half I was bailing out of positions and started my “Short” campaign. I got to the point where my account was staying around even because I had Long & Short positions. If the market went down 2000 points my shorts did well. If the market went up 2000 points my Longs did well. With the market continuing a down trend I got out of more Long positions and built up my Short position. My Short positions consist of Short Selling, Selling Naked Calls and Buying Puts. Buying Puts is a Long position but increases in value when the market goes down so I put these positions in the Short category.
I sent out a post earlier this week with a list of my Short positions, and I added to that as the week went on. I’m sorry I’m not posting all my position but there are just too many. I’m concentrating on building my account back. If I post all my trades I’ll be typing all day. I sent out a list of my Short position on the 18th. You can see that post at My Short Positions. It’s a long list and I added more later on the 18th and more on the 19th. I know it’s sounds crazy but between getting out of my Short Selling position with Delta (DAL), a Put with Apple (AAPL) and my Naked Calls expiring, I brought in a total of $27,450. My account did not go up by this amount because I still have a number of Long positions but adding the $27,450 did not hurt. At the lowest my account was down 30%. At this point it’s down 22%. The Short position definitely stopped the bleeding, and my account in on it’s way back up while the market still drops. Remember my account was up 101% last year so I’m in OK shape.
In this time of small businesses going under and people getting laid off, It’s nice to know there is a way to bring in money. This is so important! If the market is open, us as option traders, we still have a way to make money and take care of our families.
I would like to welcome the new subscribers. If anyone want to see the trades I made the week that are not on the list in the 2/18 post, or if you have any question, send me an email.
The star of this weeks trades was the Naked Call I sold on Microsoft (NMSFT). I made it on Wednesday. With the stock at $135.80 I sold 10 contracts of the $142 Call. That’s $6 Out-of-the-Money. For a 3 day option I received a premium of $4.20. On the 10 contracts that’s $4200. That’s crazy! The Call expires when the stock closed below my Strike and the $4200 was a major 3 day gain. Here’s the trade.
3/17/20 – Sell to Open 10 MSFT 3/20/20 $142.00 C @ $4.20 ($4200)
3/20/20 – Expired 10 MSFT 3/20/20 $142.00 C
(Profit +$4200)
Fantastic! This is the power of options. This is with no investment!
I’ve been getting a lot of calls, text and emails asking if it’s time to buy because everything is so low. My answer is, no one knows when the bottom will hit. I do not think it will be a V shape, I’m leaning toward a U shaped recovery or turnaround. I’m hoping the panic selling is over but I’m not ready to jump in yet. I will probably do less short position this week because you never know when a great announcement will come out. If an announcement comes out of a vaccine I don’t want to be in a ton of Short positions. I’m very happy I’m out of that long list of Short positions. I want my account to increase slow and steady, steady and slow and try to have cash available for when the buying does start. I advise to not try to pick a bottom. Myself, I’m gonna look for some conformation of a reverse before I jump in with a lot of long positions. From here, my short position will only be Naked Calls. It’s my favorite strategy normally, it’s definitely my favorite now. The premiums are still very high so I can sell $5 Out-of-the-Money and still make a nice premium and have time to buy to cover if the stock starts to move up. EX: It the stock is at $50 I’ll sell the $55 Call to expire this coming Friday.
This week I’ll try to post as many trades as I can.
Again, any question sent me an email.
Good luck and stay safe! Hopefully this will all be over soon. Enjoy the family!
Successful Trading,
Steve
The Options Coach