options trading. here is a quick video regarding the positions that we had expire as you guys
know I think it was Monday we closed out a lot of positions early which was
actually pretty fortuitous because the market was down every single day this
week I believe that that's the case you had positions like Amazon which were
down around six and a half percent this week relatively speaking we had a very
good trading week we only made one mistake which was selling that 1540 put
on Amazon on Wednesday we were very patient and very disciplined now we made
a mistake by selling the 1540 put that that position probably still has
rounding 80% probability of profit and it'll expire this upcoming Friday but at
the same time when you sell a position for four dollars and at one time you can
collect like eighteen dollars for that or maybe even twenty dollars I don't
remember exactly but I think at one point yesterday you could probably
collect around twenty dollars for that position then it becomes a it's just you
left a lot of money on the table and obviously I did as well or maybe we sold
it for like two dollars and then it was it was trading at twenty dollars but the
point is that irrespective of how a trade works out you can make money on
bad trades and you can make and you can lose money on good trades and selling
that and opening that position on Wednesday I Amazon was not a good trade
because we left a lot of money on the table
and I wasn't patient enough now we were a patient on Monday and Tuesday but we
should have been more patient now that's not to say that that there wasn't a
mcclee been a situation where we sold that put on Amazon in 1540 and then the
remainder of the day Amazon rallied and it rallied back up to the high 1600 so
you have no way of knowing you don't want to beat yourself up for not being
able to tell the future because nobody can and you also don't want to judge
yourself too harshly based upon factors that are outside your control
however on Wednesday when the market was showing substantial weakness I do
believe that we should have been more patient and waited I think we ended up
selling and opening that position in Amazon
was down around 20 and then it ended up being down around 45 in any case so we
had a few positions but besides that one trade and again I don't want to harp on
the negative we had a very good week especially considering that the market
that the market was down around like five days in a row I believe that's the
case so we had these calls from ttwo expired this wasn't a huge moneymaker I
think we sold it for around 26 cents or something so we made around a hundred
and something dollars DG we no longer have a DG position remember this DG
position we were short calls we were short calls all the way from 110 and DG
slowly and methodically increased in price all the way up to around 119 $120
when a stock becomes in the money but it hovers around the at the money strike
price it's no problem it's very easy for us to manage a roll
that position so even many of you with the UNH position if you're short puts a
like 240 that's no problem the only problem will be if UNH false
around 215 or 220 in which case you're going to have a little bit of a problem
and I will as well because you're gonna have to wait for it to increase in price
so that it gets closer to the strike price so that way it's easier to manage
but if a call position is like one or two dollars and the money or if you have
a put position like UNH you're short the to four units trading around 237 it's
not a problem it's very easy to roll and manage and to reduce the size and to
improve basis as far as this upcoming week now again I don't tell the future
and I can't forecast however you I definitely think it was an encouraging
sign that the market was down five five two straight days and the market fell
relatively it fell a lot last week I think at one point it was down around
two and a half percent three percent and because the market was definitely
overbought remember I'm Monday and Tuesday the reason why we didn't make
any trades is because despite the market being down it was so overbought that we
just simply didn't see any good entry points for us to make trades we were
patient on Monday and Tuesday so I think that the market had the ability this
past week to correct a little bit is a good sign going forward the fact
volatility didn't spike up that tremendously there's also a good sign
because there is a tremendous amount of uncertainty we were able to get rid of
and consolidate some of our existing ttwo positions I think that right now I
wouldn't say that the Amazon position at 1565 put is bad at all it's just
something to keep in mind I do want to get rid of the UNH position which we
have some contracts that are expiring this week additionally I do want to get
rid of the ttwo I was able to consolidate that position
as I mentioned earlier I took I think it was to contrast with the expiration of
last Friday that had a strike price in 90 and then 8 contracts that had a
strike price at 88 and I was able to consolidate both of those positions into
nine total contracts with a strike of 87 so as I said earlier as long as in
underlying stock trades and hovers around the strike price it's going to be
no problem so my goal this week is to continue to be patient to get rid of the
ttwo or to at a minimum reduce that size I want to also reduce the UNH position
and hopefully UNH cooperates and it increases in price above 240 and then I
want to continue being patient and making good strategic trades there was
an opportunity yesterday to open up a position in Google
I remember when Google fell to the lowell evan hundreds I thought that that
would have been a really good opportunity to acquire and obtain a lot
of premium by selling a 10 50 foot I didn't pull the trigger mostly because
that was the fifth consecutive day that the market was down and at one point the
S&P was down around 25 or 26 points and I just felt that it would be better to
wait and to show diligence and patience just in case the SP decided to fall 50
points instead it didn't fall 50 points instead of rallied into the close and
was only down five points but you don't know that at the time but definitely
Google was a really good opportunity yesterday when it fall to the low 11
hundreds to sell like a 1050 put and collect a substantial amount of premium
and remember I definitely think I think the big takeaway from this is it's
always better to be patient and to enter a opportunities and when you do have an
EI opportunity you should bet larger than normal and the reason is that
you're able to collect substantially more premium so if you guys had sold and
if we had sold the when Amazon fell below 1,600 yesterday I think it felt it
hit a low of like 1586 now I don't expect anyone to be able to call the
bottom but let's say after it fell below 1,600 let's say like fifteen ninety five
you were able to sell a like fifteen hundred put you would have been able to
collect around twelve or thirteen dollars and if you had sold five
contracts at thirteen thirteen hundred dollars per contract you could have
easily made around sixty five hundred bucks that's a lot of money and that's
not a tremendous amount of risk because in that situation amazon and fall in
five straight days and it would have been in a trade so that would have been
an easy way for you to collect a lot of money by saving your buying power
because remember once you commit then you can't then open up a new trade
because the way that it works is you the marketplace the amount of premium that
you receive is always changing all the time and once you commit capital then
you lock yourself in and then once you sell and you open a new position you in
that moment that you commit you your goal is that you want the market to
suddenly turn around and move in the opposite direction right so if Amazon
was falling yesterday and at one point it was trading in 1586 let's say you got
in 1590 which would be an amazing entry by the way at that moment that you
commit you immediately want Amazon to reverse course and trade up above 1600
and the reason why I'm saying this is that once you commit and the market goes
the other way instead of it trading down to 1590 let's say it fell all the way
down to 1550 because you want to make sure that you always keep a large amount
of buying power in reserve you can't make another trade so once you commit
you're locked in and you want the market to reverse course you just don't know
when the market is going to reverse course as a result it's always better to
be patient because if you commit to early and you think that that the
markets going to turn around when Amazon is trading at 1590 and then it trades
all the down to 15 50 if you sold the 1590 and
you collected $12 in premium if Amazon fell down to 1550 you will collect $16
in premium that's 33% more premium and that's how we get paid so remember
patience is a virtue patience is one of the most important things and yesterday
was a great example of how patience pays off so I do think that this week there
was going to be a little bit of a retracement from the losses that we
experienced this past week we had a very good trading week except for that one
trade that we made on Wednesday and this is how we make money in the stock market
we open up a lot of positions we did very well I hope that you and also
remember U and H showed a lot of strength this past week a lot the market
was down five straight days and UNH held its own so I wouldn't really worry too
much about that position from what I've seen this past week and ttwo same thing
my goal this this next week is to reduce and potentially get rid of some of the
ttwo get rid of the UNH position or reduce
some of that position and also be very patient and make good trades so that
strategically we build up our account without having or experiencing too much
stress and also without having a substantial amount of variability and
volatility based upon what the market does