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Weekly Report 2021-08-15

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WEEKLY MARKET OVERVIEW

After a couple of weeks of horizontal consolidation, the stock market touched new highs again last week. The S&P500 (SPY) started the week with an indecisive red candle on Monday, followed by a green indecisive candle on Tuesday. A breakout on Wednesday was then followed by more strong buying pressure on Thursday. The week closed at a new all-time high, showing once again how powerful this bull run has been so far. Despite all of this, we are back in overbought territory, and a new period of later consolidation, or finally a pullback, might be ahead of us.

The old economy is still leading the way up, while mega tech stocks and especially small caps have been the weekly laggards.

Weekly market performance (Week 32/2021)

S&P500 (SPY) +0.78%
Nasdaq100 (QQQ) +0.21%
Dow Jones Industrial (DIA) +0.94%
Small Caps (IWM) -1.01%

The overall market volatility remains pretty low, with the VIX still well below the 20 level.

 

 

WEEKLY TRADING JOURNAL 

Here follows the summary of last week’s activity in my Trading Journals for all the four official options strategies I trade inside the Options Trading Club.

Full disclosure. I have 100% skin in the game on these positions, as they are all trades I made in my trading accounts with real money.

 

Cash Secured Puts (CSP) Strategy

This has been a relatively quiet week for the core strategy we play inside the Discord Community, but the next one will be much more active due to the monthly options expiration cycle.

On Monday, I bought back to close the TSN 08/13 CSP $70 for a $0.04 debit, keeping 95% of the premium for a 141% AROI in just one day. That was another juicy earnings play that I had opened the previous Friday, just before the company was going to report the quarterly results.

 

The only other position expiring last Friday was the WBA 08/13 CSP $46 that expired worthless for full profit, generating a solid 20% AROI (Annualized Return On Investment) over 32 days. That was a pretty smooth play with no adjustment required.

 

So far, on my CSP Trading Journal channel, I have closed a total of 32 winning trades with a 100% win-rate since the launch of the Options Trading Club at the end of May 2021.

The members of the Discord Community have access to the full track record of all my closed trades, and, of course, to all the real-time alerts for the new trades I open each week.

 

The Wheel Strategy (WS)

Inside the Options Trading Club, I play the Wheel Strategy on just a few stocks and ETFs. Palantir Technologies is one of these, and last week I managed to let expire worthless the PLTR 08/13 CSP $24 for a 100% profit. That allowed me to keep the entire $100 premium I collected during the 42 days of the campaign, and after that, two sets of adjustments were made. Despite the position spending most of the time in-the-money, in the end, it produced an excellent 36% AROI, and more importantly, it allowed an adjusted cost basis reduction of $1 per share for the 100 shares I already own for this company.

 

Vertical Credit Spreads (CS) Strategy

Inside my Credit Spread (CS) Trading Journal, I run a $1,000 virtual portfolio to teach people that are new to options and have limited capital to start with, how to grow a small account with a conservative options strategy using discipline and patience. On Monday I posted a trade idea for a Bull Put Credit Spread on AMNG, that I was able to close after only 4 days keeping 72% of the premium.

 

The portfolio is now up 29.5% since the launch of the Discord Chatroom less than 3 months ago, producing 11 wins and one tiny loss.    

 

Time Spreads (TS) Strategy

The fourth official strategy of the Options Trading Club is on Time Spreads (TS) such as calendar or diagonal spreads. I mainly use this strategy as a delta neutral edge against the other more directional strategies traded inside the community.

At the moment, I am in the middle of a double calendar campaign on IWM that so far is proceeding pretty smoothly. This week I made the second round of adjustments to the short legs, receiving an additional net credit of $162 per contract (excluding commissions). I will post the final results in my weekly reports at the end of the campaign.

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