Selling Options Paid Me $585.57 This Week

Using Margin (sparingly) for Selling Options when Good Opportunities present themselves in the markets has been working well these last few weeks.

The stock markets are usually very weak during this season, but they tend to gain some momentum heading into the 2nd half of the Month.

As of last week, I’ve sold out of all the hedges that I had been accumulating and selling options on. I’ve been deploying that capital into some of the beaten down growth stocks that have been looking attractive.

Seasonally, these next few months tend to do better. ’m excited for things to start picking up, it means that we’ll be able to see the gains from the stocks that we’ve been accumulating.

This past week it was volatile and as a result, it wasn’t the greatest week. Nevertheless, here’s this week’s trade breakdown:

SOFI

I sold the (13) 17.5C, (4) 10.5P, (1) 11P, & (3) 11.5P. Total Profits were $150.49.

• For all CSPs, I was using margin. Between 2020-2023, I accumulated lots of SOFI… And over that time period, I’ve seen the company become profitable, navigate Student Loan Crisis, and continue to beat Wall Street’s Expectations. That is why I was comfortable using margin for the CSPs.

• From a Technicals standpoint, SOFI’s 200 Day Moving Average was hovering around $10.80 so I knew a bounce would happen soon.

AMD

I sold (2) 120C. Total Profits were 11.92.

• Because AMD’s been in the gutter lately, the premium on the Covered Calls hasn’t been much. I could sell them closer to the current strike price, but then I’d be taking the risk of having to get them called away under my current cost basis.

• I expect we’re going to be back close to the $110s soon, so I’m just in a holding pattern with this one.

HOOD

I sold (1) 33.5P, (1) 42P, (1) 48.5C, (1) 49C. Total Profits were $155.68.

• The 42P was actually written last week, so by the time the markets opened up on Monday, it was very in the money. I could’ve easily rolled this, but I wanted to take the assignment instead because of the momentum the stock picked up towards the end of the week.

• My current average is 300 shares at ~$45.75. I’m going to be looking to sell some CCs above that, and waiting for HOOD to trend a bit lower before looking to sell more CSPs in the mid 30s

SOXL (Margined)

I sold (1) 15.5P, (1) 17P, (1) 17.5P, (1) 19C. Total Profits were $90.60.

• This ETF, and SOXS can be very profitable to wheel. When the Volatility hit the Semiconductor space, this was the 1st ETF to take a beating… When it made a new low last week I immediately started to sell more CSPs

• The logic was that NVDA (makes up a large portion of this ETF) was very oversold, along with the entire market and was due for a bounce.

• Instead of only selling the CSPs, I also opted to get some shares for a covered Strangle (Sell a CSP & buy 100 shares for a Covered Call). I did this because I thought there was going to be decent amount of upside, but I didn’t want to hold the shares long term.

• This trade netted ~4.9% over 2 days. Annualize that and you’ll see the power of Selling Options!

HIMS

I sold (1) 30P, & (1) 40C. Total Profits were $176.88.

• Last week I took assignment of 100 shares of HIMS, and currently have an average of $39/share.

• My plan here is to accumulate 200-400 more shares, lower the cost basis, and wheel out.

• HIMS wasn’t responding very well when the rest of the market was pumping, which leads me to believe that we’re going to see some more downside with it. The 200 MA is sitting at ~$25 so I’m going to wait a bit before selling puts.

Thoughts on the Market for the next Few Weeks:

Sentiment changes fast… Everyone wants Dips on their favorite stocks, and when they see them they completely freeze up.

If you’ve got a long term perspective on the markets and the companies that you select, then you know that this is just a bump in the road.

Hedging your portfolio in the current market is expensive if you haven’t taken any positions yet.

My take on the markets?

I think we’ll see a short term pump, followed by a slower decline over the next few months. The Indexes have been historically flat following 2 years of very high growth, but this time around I believe it’ll be flat or slightly negative.

Trump’s Policies are too volatile and the S&P500/Nasdaq are feeling it.

I view this as a great opportunity to begin scaling into your favorite stocks, but be mindful of your risk.

Focus on longevity—staying in the game is the key to long-term success.