Yo Pit Crazies,
The Covid bug found me!
Or rather, found my oldest kid at summer camp.
You would think living on a rock in Maine was far enough away but, really, everyone is on the list.
He is fine after a slight sore throat on Monday, but it will be testing my immune system for a week or so.
I’m pretty sure I had it already in January, but will know for sure shortly enough.
Covid certainly weighed on my mind yesterday when I got the news. Let’s see how it weighed on the market.
Those are two different things.
In yesterday’s Option Pit Exclusive, I mentioned the iShares NASDAQ Biotech ETF (IBB), and it spent the whole day taking off today.
Now, I did not open any new trades yesterday. Usually when there is some goofy personal item — like your kid getting Covid — I don’t do very much in the way of new trades … but I did make some good closes (see below in The Rundown).
The iPath Series B short term VIX futures ETN (VXX) is about to make a new low for 2021 …
It has spent the last two months going nowhere, and usually when that happens the future premium in the product will start to collapse for lack of market crash.
I like seeing a vol drop and new lows in VXX to really believe this time we can get to new lower vols.
VXX three-month chart with one-day candles on top. IV 30, 60, 90 on the bottom.
We just need a couple days of not crazy. In 2021 — LOL! But it could happen.
The Lesson: When you got the blues, don’t open new trades — tomorrow is another day. But closing is OK.
The Rundown
Capitol Gains
Option Pit DC and Wall Street insider Frank Gregory and I run a portfolio approach to trading options with stocks that have good long-term prospects based on Frank’s K Street knowledge and my options expertise.
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- I closed my short Ford (Ticker: F) Aug. 20 15-strike calls for an 80% gain. I am left with the long F Sept. 17 14-strike calls and F Aug. 20 14/13 1×2 put spreads. Let’s see if Joe B. can gas-up the EV truck scene again. He was seen whipping around in a hybrid Jeep yesterday.
- I expect to open some short puts in Pfizer (Ticker: PFE) today against my current position.
- In our first Cap Gains class on Wednesday, I liked Coinbase (Ticker: COIN) for a long and Advanced Micro Devices (Ticker: AMD) for a short for Thursday morning. Check that out here as a goody for you.
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Pro Trading Room:
The Pro Room is Option Pit’s live access to Mark and myself during trading hours. Our Pro students post trade ideas with Mark and me during the entire trading session.
The Pro Room used the rally yesterday to take profits:
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- Ken A. went back to the Enphase Energy (Ticker: ENPH) well with STO Aug. 20 ENPH 165/160 put verticals for $0.65 credit. ENPH is also on the Capitol Gains watchlist as a long-side winner in the green energy space.
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Robinhood Trader:
Option Pit CEO Mark Sebastian uses the Robinhood Gamma Radar to find order flow in active names.
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- Mark still has the mojo, this time with 50% gain in AMC Entertainment (Ticker: AMC) calls.
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Trading Legion:
The Trading Legion is an intermediate-level education and a long strangle trading vehicle. The goal is to teach students the best times to buy options.
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- I closed a wheel trade in BP (Ticker: BP), but just closed the easy put spread for a 69% return on credit. I might re-dip the toe tomorrow, but at a lower put strike.
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To Your Trading Success,
AG
