My Options trading Unlocked – Newsletter 05 Aug 23

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

05 Aug 2023

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

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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 om the market with the indexes, mainly the SPX and the volatilty of the stocks with the VIX.

SPX Chart – SPX $4478

This week, with the down days, the June uptrend looks to be broken in the SPX and SPY (as in most indexes) and the downside momentum is increasing. We need to see this confirmed next week.

The SPX had already shown signs of a possible turn around with the engulfing bearisch reversal candle on 27 July 23.

VIX Chart – VIX USD 17.09

The VIX showed an up movement this week, going back above the 20day moving average, closing the week just above $17. It also has shown one of the biggest green candles of last month on the Friday close.

2. TOCF Monthly Recap July 2023

In conclusion for July : A good month with 90% winners , but one loser has spoiled the P/L (…) My ROKU strangle position went into earnings and ROKU spiked up (30% is hard to defend) – I decided to take the heavy loss, before it gets even worse. Another lesson to watch out with taking a strangle through earnings (a lesson hard to learn).

3. TOCF Portfolio Weekly Recap & Trading Plan

a. My actions this last week :

Closing Positions :

• None this week

Opening Positions :

• Opening a new position in $PYPL: STO 1 Naked Put 70, ExpDate 15/09/23, BP $1000, IVR 32, SpyB_Delta 7,19 with PoP 72% for a net credit of $2,15 – I have had my eye on $PYPL now for a while as a candidate for a permanent wheel strategy stock. With good previsions for earnings (…), I selected PYPL as a candidate. A descent stock I wouldn’t mind owning for a long term either – so I will do the wheel when assigned.
• Opening a new position in $SOFI: STO 1 Short Strangle 10P/12C, ExpDate 15/09/23, BP $2400, IVR 14,9, SpyB_Delta 0,8 with PoP 57% for a net credit of $1,16
• Opening a new position in AMD : Bought 100 shares at $108,03 close to the resistance level of 26 Jun 23 and I sold 01 Covered Call $112 for $2.84 with exp 18 Aug 23 – Cost to open = Breakeven position = $10561 – Current Breakeven downside : $105,6 – Possible profit when AMD above 112 at exp 18 Aug : Credit after sell = 112 x 100 = 11200 – 40,3 = $11159,7 -> Possible profit = $11159 – $10561 = $598. … Let’s see what happens…

Adjusting Positions :

• Rolled down the call position in COIN to 120 and to the risk to go through went through earnings (…)

Here is an overview of my current positions for both portfolios:

Most of my positions are still in the red and need improvement over time.

Not so much movement in the overall portfolio result this week, with position results balancing out the P/L. I will add som portfolio graphics of the portfolio evolution over time in the next edition. My monthly trade results are also available on our website – Monthly Trade Results.

b. My Trading Plan for upcoming week:

At portfolio level :

• The theta of only one portfolio is just above my required minimum of 0,1% NetLiq : Mexem with 60 (0,12%) and Tastytrade is below with 4 (0,11%). So to increase my portfolio theta a bit again, I may be looking to get some new positions if opportunities arise this week
• The delta are at the upper side of my desired position of a short/neutral bias related to SPY B Delta : between – 0,10 and + 0,10 of Net Liq. With the market risking to go further down, I must consider to open positions with negative deltas or adjust the deltas of the current positions.

At individual stock level :

• I will keep both PYPL and AMD till expiration and start/continue the wheel strategy if required.
• No change in LYFT : With my 100 shares of LYFT assigned at $17.5 and with a total credit received of $2.38, including my short covered call (13C) my plan is to continue selling covered calls against the stock. My max loss on this position would be $212 if the share price would go above $13 (and I would be assigned to sell the stock, if I wouldn’t roll the position out in time)

4. Weekly Watchlist

My special attention for the coming week : SOFI, AMD, PYPL, FSR

5. Other info

I have received some questions about the screenshots of the tables/spreadsheets used – they are screenshots made from the spreadsheets that I use for my keeping my trading journal (more info about my spreadsheets on my website.

I am currently working on a updated version with new possibilities and improvement in user experience. I will keep you updated …

In our discord channels, I provide live comments, trade alerts, educational info, tools and spreadsheets. and more every day in our discord room. Join anytime here: http://discord.gg/cGW6xH4RNT

Thanks for reading the TOCF Newsletter and happy trading!

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Let’s generate cash flow together !

P&K