My Options Trading Unlocked – Newsletter 02 Sep 23

Newsletter – My Options Trading Unlocked : Insights for Tomorrow’s Profits

02 Sep 2023

” I need to rethink my profit expectations, and act on it because I am underperforming “

Let me share why.

My goal is to share my journey and help you make a profit from options trading. I also write about my thoughts related to options trading and finance in general. And everything I think you may be useful to share about the stock market for the week ahead as an option trader. Every week I report about the status of my portfolio.

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1. Overall Market Overview

When I prepare for trading or following the market and my positions, I focus on two aspects : the general trend of the market with the indexes, mainly the SPX and the volatility of the stocks with the VIX. The reason why is clear in my mind : the general trend of the market and stock volatility are essential for options traders because they directly impact options pricing, influence trading strategies, and offer opportunities for risk management and profit generation in the dynamic world of options trading.

And then again, I don’t want to over-analyse too: so SPX trend and VIX levels are not far away.

SPX Chart – SPX 4415 $

Last week rollercoaster switched in a calmer week. The recover move up I have asked for last week happened : SPX closed another week in the green, with about 10 points higher than last Friday. This turned out well for me because, after rolling my positions out last week, I still had long portfolio delta.

Market outlook for next week : Nobody knows anything so I am not trading direction.

Markets remain closed on Monday due to Labor Day, giving us a 3-day long Theta weekend.

VIX Chart – VIX USD 13.09

Just at the moment I was thinking that long times with very low VIX were behind us, the VIX dropped from 17.21 to 13.09 in 5 straight down days !

I was actually hoping to get a rising VIX slowly back up to around 20. Higher VIX means higher options prices and gives us option sellers the possibility to have a bigger return. But it is clear that it isn’t going to happen this week.

2. TOCF Portfolio Weekly Recap & Trading Plan

a. My actions this last week :

Closing Positions :

• 29 Aug 23 : Closing NKE Put Ratio Spread at 55% of max profit for a 5 day 144% return : BTC 1 PRS for $0,09 resulting in a net P/L of $26,00 with a ROC of 2,00% and an Ann ROC 144%

Opening Positions :

• AMD – 29 Aug 23 :
  • Still owning 100 shares AMD
  • Opening a new position in $AMD: STO 1 Covered call 110, ExpDate 15/09/23, BP $1500, IVR 16, SpyB_Delta with PoP 78% for a net credit of $1,65

• AAPL – 29 Aug 23
  • Opening a new position in $AAPL: STO 1 Short Strangle 170P/195C, ExpDate 20/10/23, BP $2500, IVR 6,7, SpyB_Delta -4,08 with PoP 67% for a net credit of $3,20
  • Adding a little bit of theta ($7.50) with a small negative delta to lower my overall portfolio delta. Plan is to manage early at 50%

• LYFT – 31 Aug 23
  • Opening a new position in LYFT: STO 1 Covered Call 15, ExpDate 20/10/23, BP $294, IVR 2,6, SpyB_Delta 1,72 with PoP 87% for a net credit of $0,24
  • Adding on top of my 100 shares to continue lowering my cost basis, the 15 call is just above my cost basis.

Adjusting Positions :

This week I didn’t have to roll any position.

b. Results August 2023 & currently open positions:

In every first newsletter of the month, I will report about the monthly results of the previous month. So today we report about August 2023.

Here is an overview for all accounts of the results for August 2023:

I saw this nice visual way (below) of presenting the status of the monthly goal by a colleague trader, so I am sure he will allow me to remain inspired. (shout out to @JoeYurillo, absolutely worth to follow on X.

August 2023 :

• 📈 Set Goal $600 : 🟩 🟩 🟩 🟩 🟩 ⬛️ – almost at my monthly target $560 / $600 (93%)
• Realised Net Profit/Loss : $560 (0,79 % Net Liq)
• Portfolio Net Liq value : $71 .485,47 (Monthly change : + $724 or + 1,02 %)

Looking at the above numbers, I realise I am underperforming at the moment and I need to rethink my expectations in monthly profit target and strategise from there on. Remember when I speak about monthly results I always refer to the realised P/L of closed positions. The portfolio Net Liq value takes into account the unrealized P/L also.

This trading goal setting is absolutely a priority for myself this week. Any thoughts or comments you may have on this target expectations or trading goal topic, please don’t hesitate to share them in the comments.

c. My Trading Plan for upcoming week:

At portfolio level :

• Theta of both Tastytrade portfolios still need to be increased next week preferably. The theta for Mexem is just above 0,1% Net Liq and it requires, looking out to new positions with keeping an eye on margin requirement (just above my max allocation of 30 %). Especially with the rethinking of my trading goals in mind!
• The delta of the MEXEM account has come perfectly. I have a 2:1 ratio with short delta/theta. I will look to keep this ratio and try to adjust when necessary.

Most of my open positions are still in the red but with my positive portfolio delta, have recovered nicely in most of the positions this week : the unrealised P/L improved from ($2368) to ($983). Hoping to get Max profit on my the FSR position.

At individual stock level :

• I will keep both PYPL, keep selling cc on AMD and LYFT. LYFT looks to be making a bounce back after a long down move.
• Looking to close FSTR for at least 85% of Max profit
• If IWM keeps going up, I may need to roll the untested side
• The other positions seem in relatively good shape at the moment

3. Weekly Watchlist

My special attention remain the coming week : SOFI, FSR, AMD and LYFT( to add covered calls). I will add also MARA back to my watchlist to see if there is an opportunity to get back into that stock if it will go back to the $10 level. I do believe in the long term future of bitcoin and wouldn’t mind picking up stock of such a company besides owning bitcoin myself.

4. Other stuff & info

I have had a busy and productive week, posting about 6 new demo videos about the “All In Options Trading Journal Spreadsheet” – Available in our TOCF shop for less than the price of one winning option trade (!) and with a 30 day money back guarantee.

In case you haven’t notice yet, missed it, I am adding detailed demo videos about this spreadsheet on my Youtube channel.

I am thinking to organise a live Q&A session soon with those interested, so if you are let me know in the comments below or shoot me an email.

In our discord channels, we team-up with other like-minded option traders, with the aim to support each other and share valuable insights and ideas. I provide live comments, trade alerts, educational info, tools and spreadsheets via our discord room. Join anytime here: http://discord.gg/cGW6xH4RNT

I hope that providing some insights in my trading and my thoughts, will trigger some thoughts and maybe ideas that will help you with your trading and helps to become an even more profitable options trader. Don’t hesitate to contact me to talk options.

Thanks for reading the TOCF Newsletter and happy trading!

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Let’s generate cash flow together !

P&K