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Weekly Report 2021-09-12

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WEEKLY MARKET OVERVIEW

Following a long march to the upside, the US equity markets had only losing sessions throughout this four-day trading week, with the S&P500 (SPY) posting a long solid red candle on Friday. Selling pressure is increasing, and all of the major indices are currently in oversold territory. So far, it's been similar to the prior brief pullbacks in June, July, and August. We'll find out early next week whether deep buyers will step in as usual, or if this extended weakness will develop into a more serious correction.

 

Small cap stocks have been the worst performing sector in a bad week for the market.

Weekly market performance (Week 36/2021)

S&P500 (SPY) -1.69%
Nasdaq100 (QQQ) -1.31%
Dow Jones Industrial (DIA) -2.10%
Small Caps (IWM) -2.78%

As a result of the overall market weakness, the Market Volatility Index (VIX) has been rising all week long, closing above the 20 level on Friday night.

 

WEEKLY OTC TRADING JOURNALS 

Here's a summary of last week's activities in my Trading Journals for each of the four official options strategies I utilize within the Options Trading Club (OTC).

Full disclosure. I am personally involved in all of the positions indicated in my Weekly Reports. These are the real-time results of trades I execute with real money in my trading account and share in the Discord Chatroom.

 

Cash Secured Puts (CSP) Strategy

While I wait for the monthly expiration next Friday (with a lot of positions to manage), my CSP Strategy portfolio has had another reasonably quiet week.

This week, the only trade I closed was the MU 09/10 CSP $74 that I bought back for a $0.09 debit about 3 hours before the close on Friday (as the stock was trading over the strike price), keeping 97% of the premium for a 46% AROI in 31 days. That was a well-timed decision, since the stock closed the session below the strike.

Since the launch of the Options Trading Club at the end of May 2021, I have closed a total of 47 winning trades with ZERO LOSSES inside my CSP Trading Journal channel.

 

The Wheel Strategy (WS)

Due to this week's market weakness, I opened a new cash-secure put on ARKK at the $118 strike and was able to let the covered call at $125 expire worthless. This new collected premium continues to reduce my adjusted cost basis on the 100 shares I currently own. That is now $55.45 per share (excluding commissions).

 

Vertical Credit Spreads (CS) Strategy

I manage a $1,000 virtual portfolio within my Credit Spread (CS) Trading Journal to demonstrate to traders new to options (and with limited starting capital) how to grow a small account using a conservative options technique that requires discipline and patience.

The sole open position at the moment is a $155/150 Bull Put Spread on TTWO that expires next Friday. It has been impacted by the current market decline and is presently trading below the short strike price but above the long strike. Over the following week, I'll assess if and when I need to make adjustments to this position.

 

Time Spreads (TS) Strategy

The fourth official technique of the Options Trading Club is based on Time Spreads (TS), such as calendar or diagonal spreads. This strategy is usually employed as a delta neutral edge against the other more directional strategies.

With only 20 days to expiration on the long legs and insufficient premium for the rolling of the short legs, I decided to close the IWM Double Calendar campaign for an 11.29% loss.In a similar scenario in a previous campaign on SPY, I was able to book a great result, but unfortunately, IWM did not perform as well.

 

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

Take care and trade wisely!

-Gianmarco

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