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Weekly Report 2021-08-29

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WEEKLY MARKET OVERVIEW

So far, this bull market appears to be still alive and thriving. After beginning the week with a gap up on Monday, followed by two consecutive green sessions, the S&P500 (SPY) felt pretty harshly on Thursday with a solid red candle with nearly no shadows. However, that was the only evidence of weakness we saw this week, as the market posted a long solid green candle on Friday, propelling the price to new all-time highs. It's really difficult to present a negative argument as long as we observe this kind of upward price behavior.

 

With momentum distributed across the market, small caps have dominated this week, posting outstanding weekly gains.

Weekly market performance (Week 34/2021)

S&P500 (SPY) +1.55%
Nasdaq100 (QQQ) +2.26%
Dow Jones Industrial (DIA) +0.97%
Small Caps (IWM) +5.05%

After the previous week's spike, the Market Volatility Index (VIX) has remained far below the 20 mark for the whole week.

 

WEEKLY OTC TRADING JOURNAL 

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

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

After the very busy week of the August monthly options expiration cycle, the last one has been a relatively calm week for our CSP strategy, the main trading technique we use inside the OTC Discord Community.

Due to the strong upside run of the Russell 2000 index, on Wednesday I decided to close the TNA 08/27 CSP $75 for a $0.09 debit, keeping 90% of the premium for a 43% AROI in 9 days.

Then on Friday, I bought back to close also the TNA 09/03 CSP $70 for a $0.10 debit, keeping 95% of the premium for a 138% AROI in 7 days.

On Friday I also let expire worthless for a 100% profit four different cash secured puts: ADM, HPQ, and two positions on XBI

So far, inside my CSP Trading Journal channel, I have closed a total of 45 winning trades with ZERO LOSSES since the launch of the Options Trading Club at the end of May 2021.

 

The Wheel Strategy (WS)

After allowing assignment on ARKK at the $116 strike on 08/20, this week I have been able to play the Wheel Strategy both on the put and call side. The 08/27 CSP $114 expired worthless for 100% profit, while on Tuesday I took advantage of the strong bounce in the stock price to open a covered call at the $124 strike expiring on 09/03. All the premiums collected so far keep reducing the overall adjusted cost basis of the shares I currently own.

 

 

Vertical Credit Spreads (CS) Strategy

Inside my Credit Spread (CS) Trading Journal, I run a $1,000 virtual portfolio to teach traders new to options (and having initial limited capital) how to grow a small account with a conservative options strategy using discipline and patience. At the moment, the portfolio is almost fully invested with a Bull Put Credit Spread on TTWO opened last week, and one on MTCH opened the previous week.

The portfolio is up 29.5% since the launch of the Discord Chatroom at the end of May 2021, with 11 wins and one small 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 running towards the completion of a double calendar campaign on IWM. At the end of last week, the short legs expired worthless and on Monday, depending on the price action of the underlaying ETF, and the related value of the long legs, I will decide whether to open a new set of short legs or close the entire campaign.

 

If you have any questions, just drop me an email at [email protected]

Take care and trade wisely!

-Gianmarco

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