I’m well aware my week ending reports have been nothing short of abnormal. The reason is these are not normal times, and I have not been trading normally. Main Street beats Wall Street is for teaching option trading; teaching beginners. I do believe there are some very experienced traders who lose a lot of money, and do not trade with discipline, that could benefit with some beginning fundamentals, but it’s tough to teach old dogs new tricks. So I concentrate on the Grasshoppers.
Having said that, I’ve been making trades that do not belong in the Main Street beats Wall Street classroom. I’m still practicing “slow and steady, steady and slow” very disciplined strategies, but they don’t belong in my classroom and there not for Grasshoppers. However, if you feel you’re ready for more advanced strategies send me an email any time.
Let’s talk about what I’ve been doing and how my account is doing. After a huge year in 2019, up 101%, most of you read I started 2020 with an account of $207,842. You can read my first post go the year Happy New Year. January and February were good months, but then things fell apart quickly. In about a week and a half my account went down about 30%. This is 30% from my 2020 starting account. I also had great gains from January and February that were wiped out. I was not alone, things were ugly for everyone. This is where I stopped posting all my trades and stopped listing my weekly results on my 2020 results page.
I started making trades that didn’t fit into Main Street beats Wall Street. I wasn’t panicking but I was doing things I didn’t want to teach Grasshoppers. I relied on my experience and used different strategies. I started with balancing my positions between Long and Shorts. Before I started working on a strategy to bring my account back I wanted to stop the bleeding. This worked pretty well. The market was moving down 2000 and the next day up 2000. At this point I was pretty much staying even, which made me happy. Then I started making trades to start my recovery. I posted some that I felt fit into what I’ve been teaching. Besides these trades I was: day trading, selling Naked Call, selling Covered Calls, buying Calls, selling Puts, buying Puts, making combination trades, and I was buying and selling stocks. I was even Short Selling stocks. I was working it!
Sometimes I wonder where I would be if I never made another trade after March 1st. Who knows? I’m a trader, I have trouble just sitting doing nothing. Well, as of this morning my account is down 18%. I think I should be very happy with this.
This week things were not looking good because I had a lot of Naked Calls and the market had it’s biggest week since 1938. Friday’s down day really saved me. All my positions came back and now I’m out of most. I had to Roll-Out a Microsoft Naked Call, which I did early Friday morning. I felt the market was gonna go down. That positions is looking good. It’s a $150 Call which expires next Friday. The stock closed below $150 yesterday. This Call is now Covered because I had another position with Microsoft. A Covered Call, which I posted, I was not assigned. I still own 1000 shares. You can see how things can get complicated lol.
The week ended real good for me. My account went up $10,736.
As of now I have about 15 positions, most are very small holdovers from 2019. The big position I’m holding is the Microsoft Covered Call. I own 1000 share and have a $150 Call sold with a $7000 premium. If Microsoft goes up I’ll get assigned next Friday and keep the $7000 premium. If Microsoft goes down I’ll keep the stock at a lower price and I’ll keep the $7000 premium. Microsoft is a great stock, I like where I am.
What to do Next?
Are you putting your shopping list together? There are a lot of sales out there. When it comes to when to buy, I have some advice. Don’t listen to anyone, not even me! You must do your homework and get in when it’s best for you. Best for you according to your risk tolerance, your wallet and the result of your homework. No one knows where the bottom is. And, are you looking for the bottom? I think it’s unrealistic to think anyone can pick it. I think different stock will have bottoms at different times. I think some are nearing the bottom and some have plenty more to go down.
“Buy when there’s blood in the street” – Baron Rothschild
There is blood in the street, and some of it is mine. I tried to stop my bleeding but I’m not sure everyone did. At this time I’m gonna continue doing what I have been. Trying to stay safe and be ready when I think it’s time to get in. If you read about the people who got rich after 2008, and other colossal drops, they timed it correctly. They knew to buy when there was blood in the street when others were waiting for smooth sailing, but they missed the boat! At this time, when it comes to long term investments, I’m looking for stocks that don’t have much more to go down. Stocks that have the potential to go up big when this storm is over. Here’s a few I’m looking at.
PENN – PENN was at $40 a few weeks ago. I bought it last week at $5 but was assigned on a Covered Call. Today it’s at $11.77. I’m looking to get in with the stock below $9. I don’t know when the world gets back to work but when it does I feel PENN will move.
LEXINFINTECH – LX, I believe will be a mover. It was up at $16 but can get much higher. It’s at $11. Below $10 I’m a buyer.
OCCIDENTAL PETROLEUM – OXY was up at $40. A lot of big money is going in even with the oil problem and the stock down. The stock’s at $11.50. I own 500 shares now but will buy more below $10.
WEIGHT WATCHERS – WW below $10. It’s at $16 Oprah has big money in this company,
UNITED AIRLINES – The airlines have a long way to go but when they start flying UAL will also fly. Was in the 90’s, now at $31. I would love to get in at $20.
INSEEGO – INSG is at $6. I don’t think we’ll see it much lower. I’d love to get in at $5.
These are just a few low priced stock I will like soon. Some mid-range priced stocks I like:
AMD, JBL, MU, CVS, SQ, PYPL, DAL, AMAT,
And higher priced stocks that are way down:
FB, MSFT, RH, WMT, NVDA, AAPL, AMZN, BRK/B
Believe me I know there’s a lot more but these are a few I really like. Some of these I hope to buy the stock but many I’ll buy LEAPS. Right now I don’t like the LEAPS because the premiums are very high. I hope they come down a bit. With the premiums high I like to sell. I’ve been bringing in premiums of 5 to 10% a week. That’s crazy! It this continues I’ll have my account back to 207 grand in no time.
This week I’ll post any trade that fits into Main Street beats Wall Street’s classroom.
Be safe and practice social distancing.
Successful Trading,
Steve
The Options Coach