THURSDAY, AUGUST 10, 2017
Hello everyone! Hope this earnings season has made you rich! The market has been somewhat boring this week, but keeps clawing its way higher. I was having a great day on Tuesday until Ping-Pong N. Korea dude ruined the momentum. Luckily, I have been extraordinarily busy with my day job so I’ve let things sit. I believe this has helped and allows me to clear my head with work before deciding on trades. Always a good thing…
Remember: as long as you hold strikes you’re willing to exercise you can never get truly burned. My current WDC holding is a prime example. I’m getting burned, but I knew $80 would be close to the bottom if it dipped so I bought the 70 and 80 calls for Jan. Some of them before earnings and some after to lower my cost basis. I’m ok with holding all until expiration and making my decision. I already know I’ll call if necessary.
WHAT I’M WATCHING
I have a core group I’m holding in the options (trading) portfolio for now. I trade options on equities that pay no dividend (for the most part) and invest in equities that pay dividends (separate portfolio). This has always been my strategy and it works very well. My core options (trading) group consists of the following:
Nvidia [stock_quote symbol=nvda] EARNINGS AFTER THE CLOSE TODAY! This is a big day for NVDA and I’m all excited! I am holding roughly 700 shares through options including long positions and spreads. I believe we’re going higher, but have enough cash to catch another dip. Should be interesting!
Western Digital [stock_quote symbol=wdc] WDC pays a dividend, but it’s just too risky currently (and not a good enough dividend) to hold in the other portfolio. As stated above, I’m holding the Jan 2018 70 & 80 Calls and plan to exercise.
Pandora [stock_quote symbol=p] Suppose I should have closed my spread right before earnings, but regardless I’m still profitable $40.00 and holding. It’s starting to inch back up. I’m staying positive.
Dominos [stock_quote symbol=dpz] Again, this one pays a dividend as well, but rather volatile currently and not a large enough dividend to make it worth it. I’m holding the Sept 200 / 210 Call Spread and I’m down.
Rite Aid [stock_quote symbol=rad] You’ll be seeing this one on the list until Jan 2019 (yes, that’s correct). I hold 125,000 shares worth of LEAP long call options on this puppy and I’m actually profitable 3.88% currently (if you can believe that). The 2019’s have always been profitable. It was the 2017 July and Aug that ate my lunch. The 2019’s were my original trade and I should have stuck with my gut! I need $4.50-$4.85 per share to clear roughly $30,000.00.
MARKET IN THE FALL
Let’s face it…this is the beginning of the end of 2017. It’s been fun! It’s been exciting! It’s been highly lucrative! I am currently up 35% or so on the trading portfolio and 12.5% on my stock portfolio. Not too bad. I consider everything after Labor Day risky and the time to sit back and watch the market (and college football!!). I have no regrets (except maybe 3D Systems that I lost $3700.00 on last week – ouch!). I calculate had I not executed 3D and Rite Aid I would probably end the year up over 50%.
I figure it’s worth a few risks here and there if you can remain up over 35% for the year. I mean really? My professionally managed portfolio is up 8%…I win!
I like to wait until after Thanksgiving and Christmas to scoop up some good deals so I’m looking forward to that. My point is: if you haven’t made your money for 2017 you’re probably not going to. I anticipate a rally during October, but that’s it. If you have made money and you want out I would wait until mid-October.