Cashing in On the Shock and Awe
If you're new to the New Money Club or have any questions about how to allocate positions or how to execute trades, watch this video first.
Dear New Money Club Trader,
The markets started out strong this week and are soaring higher after the U.S. unexpectedly added 2.5 million jobs last month. In the middle of a pandemic, nationwide looting and political unrest, you were able to make some fantastic gains.
As I mentioned last week, there’s a large disconnect with the stock market vs. the main street. Yet, the only thing that matters is if we’re on the right side of the market.
The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), is holding at 24. This is coming in 6 points lower than last week’s reading, but volatility is still elevated.
We’ll keep to the system and manage our winners.
Let’s talk shop...
Portfolio Update
On Monday:
- Sell-to-close Vale S.A. ADR (NYSE: VALE) July 17, 2020, $10 call (VALE200717C00010000) at the market.
- Buy-to-open Tyson Foods Inc (NYSE: TSN) June 5, 2020, $65 call (TSN200605C00065000) up to $0.30 per contract or better, for the day.
On Wednesday:
- Sell-to-close Teck Resources Limited (NYSE: TECK) June 19, 2020, $10 call (TECK200619C00010000) at the market.
On Thursday:
- Sell-to-close Tyson Foods Inc (NYSE: TSN) June 5, 2020, $65 call (TSN200605C00065000) at the market.
Right now, we’re 100% in cash.
After-Action Report:
Vale S.A. ADR (NYSE: VALE) July 17, 2020, $10 call
Date: May 26, 2020
Reason: Our system spiked on sure bet activity that these options would pop higher in the coming weeks.
Outcome: Closed for 100% gain.
Notes: We played this exactly as we should, selling into strength. Looking at today’s prices, we left money on the table. That’s in hindsight, and it could have turned into a loser.
Teck Resources Limited (NYSE: TECK) June 19, 2020, $10 call
Date: May 18, 2020
Reason: Our system spiked on sure bet activity that these options would pop higher in the coming days.
Outcome: Closed for a double-digit gain.
Notes: This one is a little frustrating because we held through the downturn while adding to our position. We executed as we should, selling into strength. Today’s spike higher is what we were looking for. It’s in hindsight as well, but that’s how close making money and losing money can be in the financial markets.
Tyson Foods Inc (NYSE: TSN) June 5, 2020, $65 call
Date: June 1, 2020
Reason: Our system spiked on sure bet activity that these options would pop higher in the coming hours.
Outcome: Closed for 50% loss.
Notes: The beauty of options is you place your trades and can let them play out because you know the full amount you can lose. This was a cheap bet and I usually let something like this play out, but the reaction on Wednesday’s news shook us out. Losing isn’t fun and this loss falls on my shoulders. We’ll get them on the next one.
I’m looking forward to next Wednesday, so make sure to send your questions now to questions@newmoneycrew.com.
Have a great weekend and I’ll have a new trade for you on Monday.
As always, you can track our portfolio here.
To your wealth, freedom and options!
Joshua Belanger
New Money Club
P.S. Don't forget to sign up for SMS Text Alerts if you haven't already. It is on the right-hand side of the members' area.