September Expiration — Your Details Inside

Dear New Money Club Member,

Fall is on the way, and the weather is cooling off…

That seems to be the story with stocks on this pullback. But don’t be concerned because, despite the market weakness, we’re able to thrive in any market.

As you saw this week, we closed out 204% and 50% real-money profits in TSM and MLCO.

Today brings with it a September options expiration. That means two of our options positions will expire at the close. There’s nothing you need to do — but stay tuned. I will address everything below.

But first … the fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX), is at 26. As we’ve seen, it pays to be prepared for more dips ’n rips that will create a lot of fast profit opportunities.

Despite what happens, we have the advantage of being nimble and able to thrive in any market. And by following the hot money, we can block out the noise and focus on the next trade to help us get through this choppy market.

With that, let’s talk about those two positions expiring this week…

Portfolio Update

Two of our September expiring trades have fallen short of our profit targets.

1. ANGI Homeservices Inc. (Nasdaq: ANGI) Sept. 18, 2020, $15 calls (ANGI200918C00015000)

2. Energy Transfer LP (NYSE: ET) Sept. 18, 2020, $6.50 calls (ET200918C00006500)

Unfortunately, we don’t have more time for these positions to play out. Taking losses isn’t fun and can be painful. That’s why position size is so important.

Again, there’s nothing you need to do with either ANGI or ET. These positions 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 keep an eye out for those!)

Now, on Monday, we elected to:

  • Buy to Open Taiwan Semiconductor ADR (NYSE: TSM) Oct. 2, 2020, $85 calls (TSM201002C00085000) up to $1.15 per contract or better, for the day.
  • Buy to Open Regions Financial Corp. (NYSE: RF) Oct. 16, 2020, $12 calls (RF201016C00012000) up to $0.65 per contract or better, for the day.

And on Tuesday, we issued alerts to: 

  • Sell to Close Taiwan Semiconductor ADR (NYSE: TSM) Oct. 2, 2020, $85 calls (TSM201002C00085000) at the market.
  • Sell to Close 50% of Melco Resorts & Entertainment (Nasdaq: MLCO) Oct. 16, 2020, $20 calls (MLCO201016C00020000) at the market.

Right now, our open positions are:

  • Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 calls (NAT201016C00005000).
  • Melco Resorts & Entertainment (Nasdaq: MLCO) Oct. 16, 2020, $20 calls (MLCO201016C00020000) — 50%.
  • Regions Financial Corp. (NYSE: RF) Oct. 16, 2020, $12 calls (RF201016C00012000).

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

After-Action Report

Taiwan Semiconductor ADR (NYSE: TSM) Oct. 2, 2020, $85 calls (TSM201002C00085000)

Date: Sept. 14, 2020

Reason: Our system triggered a buy signal after a $17 million New Money bet was placed that would only profit if shares soared higher.

Outcome: 204% gain!

Notes: You executed this perfectly. Shares soared higher the following day, sending our calls into triple-digit territory. But as we saw, markets move fast. That’s why it’s important to manage our profits. Greed is good, but gambling is foolish.

Melco Resorts & Entertainment (Nasdaq: MLCO) Oct. 16, 2020, $20 calls (MLCO201016C00020000)

Date: Sept. 7, 2020

Reason: The New Money Monitor spotted a $15.5 million whale trade, betting shares would soar higher.

Outcome: 50% gain on half of the position.

Notes: You executed this perfectly. Markets move, and we must manage our profits. You were able to lock in profits and let the rest ride since these contracts have time for more upside. Now, we don’t want to allow MLCO to suffer total time decay, so I’m watching how it holds at these current levels.

ANGI Homeservices Inc. (Nasdaq: ANGI) Sept. 18, 2020, $15 calls (ANGI200918C00015000)

Date: Aug. 24, 2020

Reason: Our system triggered a buy signal after a $13.3 million New Money bet, which would only profit if shares soared higher.

Outcome: Expired worthless.

Notes: This loss falls on my shoulders. These contracts decreased in price for a few days, but then spiked back higher. Unfortunately, the floor dropped out the next day. That’s where I should have pulled the plug to salvage the rest of the premium. After a large move lower like that, typically we see some relief. But the premium on those options deflated quickly. That’s a key point about options: Sometimes we get caught flat-footed and know our full loss amount before order entry.

Energy Transfer LP (NYSE: ET) Sept. 18, 2020, $6.50 calls (ET200918C00006500)

Date: Aug. 31, 2020

Reason: Our system triggered a buy signal after a $2.1 New Money bet, which would only profit if shares soared higher.

Outcome: Expired worthless.

Notes: We took our shot, but this didn’t play out as anticipated. Energy has been lagging, and I thought this activity was a signal that money would start to rotate into this sector. Sometimes New Money is wrong and losses happen. But keep in mind that taking a 100% loss on a cheap options trade is often preferable than 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.

That’s it for me today. I’m looking forward to answering your most pressing questions this upcoming Wednesday. If you want yours included, send it over to questions@newmoneycrew.com.

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. The wedding went amazing!

Unfortunately, it rained early in the day and we couldn’t have the ceremony on the terrace at Trump Tower in Chicago.

But we were still able to take some pictures outside. This is my wife and me on LaSalle Street in front of the Chicago Board of Trade: