August 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 Club Member, 

Happy August options expiration Friday!

We have two options positions that expire today. There’s nothing you need to do, and I will address them below.

The big story this week is that the V-shaped recovery in the S&P 500 is complete.

The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), is holding at 22. 

Volatility sits at the lower end of the March peak. But it’s elevated compared to the exact price levels in the S&P 500 before the corona crash. So, that means markets will continue to whip around.

It hasn’t been the best month of trading … but that happens. And while giving back some profits is never fun, it’s sometimes inevitable. Like a good hitter in baseball, we must focus on the next pitch and not let the last one beat us again.

We’ve had a heck of a run going into August, and there will be plenty of fast profit opportunities coming our way — so be prepared!

And typically, we see a seasonal sell-off as we head into October. That means the markets will start buzzing again with many fast profit opportunities.

That’s my promise to you: to navigate you through any market easily and profitably.

Portfolio Update:

Two of our August expiring trades have fallen short of our profit targets:

  • China Mobile Ltd. (NYSE: CHL) Aug. 21, 2020, $40 call (CHL200821C00040000).
  • Box Inc. (NYSE: BOX) Aug. 21, 2020, $20 call (BOX200821C00020000). 

Unfortunately, we don’t have more time to let these positions run. There’s nothing you need to do, and they 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 for much higher potential gains than buying stocks outright.

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, we added our newest position: 

  • Buy-to-Open the Intel Corp. (Nasdaq: INTC) Aug 21, 2020, $50.50 call (INTC200821C00050500) up to $0.19 per contract or better, for the day.

 And on Thursday, we issued the following sell:

  • Sell-to-Close the Intel Corp. (Nasdaq: INTC) Aug 21, 2020, $50.50 call (INTC200821C00050500) at the market.

 Right now, our open positions include:

  •     Nordic American Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000).
  •     Cameco Corp. (NYSE: CCJ) Sept. 18, 2020, $12 call (CCJ200918C00012000).
  •     Snap Inc. (NYSE: SNAP) Aug 28, 2020, $23.50 call (SNAP200828C00023500).

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

After-Action Report:

Intel Corp. (Nasdaq: INTC) Aug 21, 2020, $50.50 call (INTC200821C00050500)

Date: Aug. 17, 2020.

Reason: Our system triggered a buy signal after a $36 million “bet” was placed. One that would only profit if shares soared higher.

Outcome: 10% gain.

Notes: You executed this perfectly, but I put us in a tough situation by having to react so quickly trading weekly options. I’m aggressive and was swinging for the fences because I wanted you to nail a big fast triple-digit gain. We learned and will move forward. 

China Mobile LTD ADR (NYSE: CHL) Aug. 21, 2020, $40 call (CHL200821C00040000)

Date: July 6, 2020.

Reason: Our system triggered a buy signal after a $3.5 million “bet” was placed. One that would only profit if shares soared higher. 

Outcome: Expired worthless.

Notes: We took our shot, but this didn’t play out as we anticipated. Losses will happen, but keep in mind that 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.

Box Inc. (NYSE: BOX) Aug. 21, 2020, $20 call (BOX200821C00020000)

Date: July 20, 2020.

Reason: Our system triggered a buy signal after a $14.6 million “bet” was placed. One that would only profit if shares soared higher. 

Outcome: Expired worthless.

Notes: Alongside our signal, share prices were a stone’s throw from recent highs at the time. I thought we would rally back into highs alongside other work-from-home trades. I was head-faked, and the premium on those options deflated quickly. Sometimes the bad guys win, and this loss falls on my shoulders. 

I’m looking forward to answering your most pressing questions this Wednesday. If you want yours included, send yours 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