We Have Options That Expire Today — Here’s What to Do

Dear New Money Club Member,

All three major indexes have been stuck like a tire in mud this week, but there’s been a lot going on under the hood.

In short, this is a crazy market, and we’ve been on the wrong side of it the last few weeks.

But slumps happen. Ultimately, it’s important we work through them and focus on the next trade. That’s because trading is probabilities at its core. And with these out of the way, the probabilities say our next trade could be a winner.

Now, the CBOE Volatility Index (VIX), aka the “fear” index, is still above our key 15 levels, trading at 22 — indicating we need to continue to be cautious for a possible shakeout. As always, though, we’ll focus on the signals and ignore the noise.

OK, before we talk about our newest position this week, I want to share a last-minute announcement…

I’m excited to reveal that I’ll be part of Wealth365’s “Best of the Best” event tomorrow, Saturday, January 23, 2021.

I’m scheduled to present from 12 p.m. to 1 p.m. Eastern time, where I will be sharing my presentation on “The Quicker, Better Way to Trade Options.”

This is a virtual event and FREE to attend. But if you need more of a reason to join me tomorrow, I’m giving away $2,500 in cold hard cash during my presentation. Just click here to RSVP your seat now!

And with that, let’s talk shop…

Portfolio Update

Despite beginning January by closing two winning trades, the last two weeks we’ve had several that have fallen short of our profit targets.

And today, these two positions expire:

  • Cloudera Inc. (Nasdaq: CLDR) Jan. 22, 2021, $15 calls (CLDR210122C00015000).
  • Coty Inc. (NYSE: COTY) Jan. 22, 2021, $8 calls (COTY210122C00008000).

Unfortunately, we don’t have more time for these positions to play out. There’s nothing you need to do, and they will be removed from your account over the weekend.

Now, on Monday, we issued an alert to:

Buy to Open Schlumberger Limited (NYSE: SLB) February 5, 2021, $26.50 calls (SLB210205C00026500) up to $0.85 per contract or better, for the day.

So right now, we’re holding:

  • Altria Group Inc. (NYSE: MO) Jan. 29, 2021, $43 calls (MO210129C00043000).
  • Schlumberger Limited (NYSE: SLB) February 5, 2021, $26.50 calls (SLB210205C00026500).
  • América Móvil, S.A.B. de C.V. (NYSE: AMX) February 19, 2021, $16 calls (AMX210219C00016000).

After-Action Report

This is our debriefing of every trade closed — or ones that expired. It’s where we analyze what happened, why it happened and how it can be done better … sort of like what the military uses after missions.

Cloudera Inc. (Nasdaq: CLDR) Jan. 22, 2021, $15 calls (CLDR210122C00015000)

Date: December 22, 2020

Reason: Our system triggered a bullish signal after a $20 million New Money bet, which is a 100% surge in call options purchased.

Outcome: Expired worthless.

Notes: It’s frustrating to see a winner turn into a loser so quickly. We had a nice profit, and I was on the verge of pushing out an exit the following morning from our entry. But shares paused and I decided to let it play out.

A few days later, we found ourselves behind the eight ball and clinging to hope. This is the frustrating part of trading because if we took our profit and prices continued higher, you’d be frustrated that we sold too early. That’s why I say you don’t go broke closing out winners; you go broke taking losses. Unfortunately, we got caught flat-footed.

Coty Inc. (NYSE: COTY) Jan. 22, 2021, $8 calls (COTY210122C00008000)

Date: December 22, 2020

Reason: Our system triggered a bullish signal after a $12 million New Money bet, which is a 300% surge in new call options purchased.

Outcome: Expired worthless.

Notes: We took our shot, but this didn’t play out as I anticipated. Options are great because of the leverage, but timing is so critical. Also, every stock and option is different, and it’s tough to have a general rule like a “take profits at this percentage” approach.

This position did turn green the following day for a 10% gain. Unfortunately, similar to CLDR, this quickly turned red and we found ourselves behind as prices traded in a tight range.

One thing to take away from these two soured positions is the importance of managing our winners … because they can disappear quickly.

So, let’s keep focused and let the market come to us.

Have a great weekend, and I’ll have a new trade for you on Monday.

To your wealth, freedom, and options!

Joshua M. Belanger

New Money Club

P.S. I also have a big announcement that I’ll share with you next week that you’re going to love.