July Expiration - Here Are Your Details Inside

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 Crew Trader,

Happy July options expiration Friday! We have an options position that expires today. There’s nothing you need to do, and we’ll talk a little more about it shortly.

Because it’s options expiration day, we’re seeing odd price action today… kind of like a leaf blowing around.

This happens because options positions that expire in-the-money on today’s market close need to be rolled forward or closed. And that’s despite the broader markets hitting the pause button this week.

But we didn’t hit the pause button. And you’ve seen your account soar higher by closing out back-to-back-to-back winners. In fact, we’ve cashed out 8 out of the last 9 trades as winners!

Volatility continues to create opportunities. But it’s also why timing and managing our winners are essential to keeping our profits.

That’s the power of options!

The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is holding at 26. That means we are still 2x the average level of volatility, so we’ll continue to see the markets whip around.

Then buckle up for next week, as we have the EU summit over the weekend. Plus, Congress is voting on another stimulus along with Microsoft Intel and IBM earnings releases.

Portfolio Update:

Despite our recent streak, one of our July expiring trades has fallen short of our profit targets. That’s our...

  • Novo Nordisk A/S ADR (NYSE: NVO) July 17, 2020, $72.50 call. Unfortunately, we don’t have any more time for this position to play out. Taking losses isn’t fun and can be painful. That’s why position size is so important.

There’s nothing that you need to do. And this will be removed from your account by Monday morning. But remember...

Our limited risk options allow us to trade profit opportunities with greater flexibility — and much higher potential gains than buying stocks outright.

And we’ll have a brand-new batch of trades coming in a few weeks for another shot at quick profits. (So, stay tuned!)

On Monday:

  • Buy-To-Open STMicroelectronics (NYSE: STM) Aug. 21, 2020, $35 call (STM200821C00035000) up to $0.45 per contract or better, for the day.
  • Buy-To-Open the Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000) up to $0.54 per contract or better, for the day.

On Tuesday:

  • Sell-To-Close the STMicroelectronics (NYSE: STM) Aug. 21, 2020, $35 call (STM200821C00035000) with a $0.60 limit or better; for the day.
  • Sell-To-Close the Vale S.A. (NYSE: VALE) Aug. 21, 2020, $12 call VALE200821C00012000) at the market.

Right now, our open positions are:

  • Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000).
  • China Mobile LTD ADR (NYSE: CHL) Aug. 21, 2020, $40 call (CHL200821C00040000).

Now we wait and let the market come to us. And I’ll be keeping you updated every step of the way.

After-Action Report:

  • STMicroelectronics (NYSE: STM) Aug. 21, 2020, $35 call (STM200821C00035000).

Date: July 13, 2020.

Reason: Our system spiked on sure bet activity after a $5.5 million “wager” was placed, betting shares would pop higher in the coming days.

Outcome: 33% gain!

Notes: We executed this perfectly. This is not only a quick profit but a lesson why we must take our profits when we earn the right. Shares barely moved on Tuesday, but implied volatility increased, which made our options increase in price. 

Since our exit, those options have been flat. It’s always best to lock in profits because we can always get back in at better prices. Next up:

  • Novo Nordisk A/S (NYSE: NVO) July 17, 2020, $72.50 call (NVO200717C00072500).

Date: June 22, 2020.

Reason: Our system spiked on sure bet activity after $26.9 million “wager” was just placed, betting shares will soar higher in the coming days.

Outcome: Expired worthless.

Notes: We took our shot, but this didn’t play out as we anticipated. Loses will happen, but keep in mind, taking a 100% loss on a cheap option trade is often preferable to taking a smaller percentage loss on a stock trade. 

And the result – even a 100% loss – will have you better off than the equivalent stock trade. Another benefit of a conservative options strategy is that it leaves capital available to be more strategic.

  • Vale S.A. (NYSE: VALE) Aug. 21, 2020, $12 call (VALE200821C00012000).

Date: June 29, 2020.

Reason: Our system spiked on sure bet activity after 6.7 million “wager” was placed, betting shares would pop higher in the coming days.

Outcome: 136% gain!

Notes: We executed this perfectly. We earned the right to take profits and we sold when shares ripped higher. We locked in a great triple-digit gain! 

I’m looking forward to answering your most pressing questions next Wednesday. If you want yours included, email it 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