Hey Guys,
The market is down this morning. It did not end up breaking through that ceiling at the top of the range yesterday. Now it's back down near the bottom of the range. In this volatile market, the range we're in seems somewhat standard, but it's about 100 points wide, which means we're going back and forth more than 2% each day. In normal market conditions these would seem like seismic shifts, but right now it feels normal.
I don't have many positions open right now, so I'm not overly exposed to the market volatility at this moment. That said, I did pick up some new positions today. I bought stock for SYY in the main account and I sold options for it in the extra options account. In the low-priced account I bought stock positions for BLMN and PFGC.
With my options trades, I choose from these three trading mechanisms for taking the trade:
1) buy a call spread (my preferred mechanism) -- the "buy" leg is at the money and the "sell" leg is 2 ATRs out of the money
2) buy a deep-in-the-money simple call -- the buy leg is 2 ATRs in the money
3) sell a naked put -- the sell leg is at the money
I choose the mechanism that has the best value at that moment. If all you care about is following the picks, then you can ignore all this because I've already done the work for you and I post the trade that uses the optimal mechanism. But if you want to learn more about this, or if you prefer to exclusively use just one of the mechanisms above, you can learn to do it on your own using the tutorials on the website. The videos on this page show how I set up each trade mechanism. And the video on this page goes over the basics about options.
Today I had two stock positions reach their time limits. I closed those -- EXPE was a small loss and OMC was a small gain.
Yesterday I had some options positions close. I got dirty-dogged by DDOG. (I've been wanting to say that all day.) That position was flashing profit all week and then it tanked yesterday at the last minute. On my SPY put position, it showed one of the reasons why I like selling these naked puts -- the underlying SPY ticker ended up right back where it started when I first sold the put, and yet I walked away with more than a 50% profit (I originally sold it for 5.75, and then I bought it back for 2.45, a profit of 3.30).
If you have any questions or feedback, I'd love to hear from you.