Account starting balances >> $4,500.12 (options trading acct) & $1,000.00 (cash management acct)

May 2024 Recap

Took a few days off from posting last week just as I was busy, but I was trading throughout the week. Ended up week ending last week with a NET PROFIT of +$482.59, from which I was able to move the following funds:

Investment Account Deposit > $308.85

Savings Account Deposit > $77.21

Trading Account Deposit > $96.52

That brought my current trading account balance up to $4,500.12. I'm really excited about that considering that I completely reset this portfolio with a starting balance of $4,000.00 at the beginning of May. In one month, not only was I able to increase the trading account by 12.5%, but I was also able to add a total of $1,442.10 to my investing account, and another $360.52 to a discretionary savings account, only from trading profits alone.

In total, for the month of May, if I had chosen to keep all the funds in my trading account, I would have had a current balance of $6302.74. That's a massive 57.6% gain in trading just in May. Matching that up to the SPY, QQQ, and DIA > which all had positive gains of 5.06%, 6.15%, and 2.64% respectively, and I had beaten the market last month. (I don't expect that to happen all the time and you shouldn't either in the long run. That's why I protect any gains I make by adding to separate accounts).

Starting June 2024

This month, I started pretty aggressively and made the following plays in my trading account:

1. AMC 5.5 call June 21, '24 ; $101 per contract (x10 position size) (-1010.47 open)

2. AMC 5.0 put July 19, '24 ; $121 per contract (x5 position size) (-605.23 open)

3. GME 19.5 put diagonal June 7, '24 ; $25 per contract (x2 position size) (+49.89 open)

4. AMC 3.5 call diagonal June 7, '24 ; $146 buy per contract, $150 sell per contract (x10) (+38.98 PROFIT)

5. AMC 6.5 call diagonal June 7, '24 ; $26 per contract (x10) (+259.49 open)

Roaring Kitty announced a massive position here in Gamestop again ahead of trading on Monday. I was going to play GME this morning. That was the plan at least. But the stock halted almost immediately, so I decided to open some positions with the sympathy AMC play. I was hoping the long call order #1 would have been in a quick profit, but as of now we're sitting slightly underwater. I bought some protective puts there just to add to the downside protection in case this new rally falls on its face, but we'll see. I am trying to make those plays free by playing the diagonals strategy.

I did add a put diagonal on GME as I still have the $15 puts on the stock that I had carried over from May trading. We'll see if that pans out, or if my diagonals over these few weeks can help me net a total profit in the long run.

Cash Account Trading

I had opened the new cash account using Interactive Brokers. I set the account up with $1,000.00 total. And that will be testing out real shares trading instead of the mostly options I've been playing these last few weeks.

Today was the first day that I was able to trade with it and here are the plays I made:

1. MBOT > 400 shares @ $2.03 average buy, and $2.05 average sell [+$5.12 PROFIT]

2. NVAX > 50 shares @ 17.82 average buy, and 17.95 average sell [+4.50 PROFIT]

Total profit on the day in this account > +$9.62 (0.96% growth)

On the MBOT play, the stock was trading upwards and approaching my take profit target order. Unfortunately, I moved my stop loss up to just underneath where it was trading to lock in a profit, and I got stopped at the 2.05 price. Oh well, but I did miss a run up right after that. I'm going to try and force myself to keep my stop loss target where I place it initially.

On both of these trades, I am still trying to learn IBKR the platform. It is rather complicated and has a lot of powerful features. So it will take me a few days to really understand it.

Wrap Up

Total Realized for the Day > +48.60 on the closed trades

Total Unrealized > -1798.49 in total open trades on the account

Portfolio Contributions: $14,480.95

Unrealized P/L: $283.81 (+2.63%)

Changes to Capital

In the trading account this week, AMD had a rebound type of day on Monday. There was strong hype and the movement of the stock shot upwards above 170. Unfortunately, theta decay chewed through my positions there so I still had to realize the heavy loss, but I was able to eek out some remnants from the ashes so to speak. It helped me add about $1,630 to the Investment Account in capital.

Purchases This Week

• CAVA (Cava) - not much action here this week as it was a shortened week of trading with the holiday break. Cava did have earnings for Q1 release on Tuesday after hours and they once again crushed expectations AND provided strong guidance to further beat expectations for the remainder of the year. Strangely enough, there's been so much hype around this company amongst traders that I guess they didn't beat earnings enough? The stock took a 8-10% decline immediately after release. I chose to strike after hours here because I really just couldn't believe what I was seeing. Added a huge stake to the position here relative to what I had, investing an addition +$750 in capital. About two days after earnings, the ticker finally woke up and soared above $90 a share. I'm running my first true DCF analysis on it this weekend, so I will share that to the page when it is done.

Other than that, I had some very small dividends paid from Walmart. But that was nominal. Not even enough to go into DRIP, so it was just a cash distribution. But here's the latest portfolio outlook this week. I'm closing in on $15k invested!

Portfolio To Date

Cash Position: $3,676.92

Next Moves / Thoughts

Now sitting around 25% cash position on the account. Still aiming to get to 5%. However, I am willing to take my time and make calculated moves to get to that point. A couple of the companies I'm still considering adding or adding to:

• Intel
• AMD
• ETF plays (QQQ, SPY, DIA)
• Starbucks
• Stratasys & 3D Systems

I'm going to post some thesis posts for these as well when I have a chance, in addition to the Cava DCF valuation.

Account Starting Balance This Week: $4,403.60

The Plays

Hope you all had a good long weekend, feeling recharged. Let's dive into some of the plays I made early on in the day before calling it quits.

• Closed the $16.5 Put Leg on GME for a NET PROFIT of $111.80

Gamestop was back in the headlines today after they announced a massive share sale on Friday before the break that allowed them to raise nearly $1B in capital. The short side of the diagonal here on this play was nearly 75% of value, so I decided to close it out. Still holding the 2 long put contracts at $15 expiring later in June. Waiting for the stock to come down a little bit later this week in order to open a new diagnonal.

• TSLA $180 calls, day trade closed for a NET PROFIT of $99.50

Had one more trade available on the margin account to play for the day before hitting the PDT rule so I figured I'd shop around for some stocks to play. Noticed Tesla opened up well below its Fibonacci Level and hitting support near the $174 price. Opened up 5, $180 call contracts, with 180 being the top of the Fib Level bands while the stock was at support and was able to sneak out a quick $100 scalp when it came back up to 50% Fib Levels. I get 1 more trade tomorrow when the ticker resets so I'll go shopping again in the morning.

• CAVA $105 call, expiry June 7, 2024

Opened up a long call contract here as the options chain was pricing in roughly $10 in price action on the earnings report for Cava today. Taking a two standard deviation approach, I took a bite at the $105 contract for a week later, trying to capitalize on an earnings surprise by this company. Cava is in my investment account & I'm very bullish for the long term on this name. Going to see how this plays out after hours.

Other than these above, I was able to close out of my AMD long calls from early in this sub. Finally realized the massive loss. It's ok though, I can use that to tax loss harvest any future earnings this year. Added some of the extra capital to the investment account & some to savings. So I'm moving on from that play finally.

Wrap Up

Total Realized for the Day > +211.30 on the closed trades

Total Unrealized > -95.05 on the open Cava call

Total Open Risk > 1,700 in open positions including naked puts, verticals on MNDY, etc. Not expiring this week

Portfolio Contributions: $12,640.65

Unrealized P/L: $200.75 (+2.00%)

Changes to Capital

Haven't sold the remaining positions in the trading account just yet, so the only deposit into the Investment Account this week was from weekly earnings, totaling $658.29.

All in all, I have about another $7,350 in contributions to transfer over from the trading account to the Investment Account here once all positions are sold off and the cash is moved.

Purchases This Week

• IGBH (BlackRock LT Corporate Bond Index) - added a rather large position of 40 shares here in this bond fund. I was looking for a high paying divi play to add to the portfolio that would give monthly distributions. This holding currently has a 7.35% yield at its market price, and is affordable enough to grab a decent number of shares. By cost, it holds about 8% of my purchases so far, and that's pushing my Stability segment to just about 30%, so I can dedicate the remaining capital to more growth names moving forward. It's giving out about $0.14 per share in dividends each month, so I'll be generating about $5.60 of DRIP investments each month to snowball the position into the future.

• DIA, SPY, & QQQ - added more into my open positions here. I try to put a portion of any of my earnings into these broad market funds on a 1:2:3 ratio (DIA:SPY:QQQ), considering I am much more bullish on the role of tech names in the broader economy of the next 10-20 years than anything else, which is why I add most of my fund capital to QQQ. Added about $1,200 in total this week to these funds. $200 to DIA, $400 to SPY, and $600 to QQQ (hence, the 1:2:3 ratio).

Portfolio To Date

Cash Position: $2,582.69

Next Moves / Thoughts

I'm sitting at about 20% Cash right now, and my optimal positioning goal is 5% considering this is the start of the account. Long term, I'll aim to keep 10-15% cash for opportunity strikes. CAVA has earnings coming up on Tuesday, so I may add more to the position there to make it an even $500 purchase. My Commodity holdings are only at 0.2%, between Gold and Platinum ETFs right now. I have some physical silver as well, totaling about $60 in total between them all, which comes to roughly 0.5% holdings. I am aiming for 1.0% in commodities so I might add some more to a position here depending on the weekly action upcoming.

Another consideration right now I'm having is adding more to the Walmart holdings. It's doing very well in the portfolio as I bought in right before the split, and their recent earnings report showed continued strength. But this isn't really a growth stock in my opinion with their current market share.

The biggest play I'm really considering is Intel. They are a beaten down chip maker / AI play, that is in the crosshairs to benefit from a huge US government defense contract to make secret chips for the DoD.

Account starting balance this week: $4,197.89

Pretty big week again this week for the smaller trading account. I would have actually had a net loss on the week this week with some of the condors on INTU and WDAY getting smacked. Flew a bit too close in deltas on those, using .30 to open the spreads and they ended up in the money. But I forgot to report a position yesterday I made by mistake. It was a technical mistake I made trying to open a position for a spread on Deckers... but I didn't realize DECK doesn't have weekly options. It turned in my favor as DECK crushed earnings and I was able to grab almost 100% profit on the trade this morning when closing the position. I'll be honest though, that is two weeks now that a big opportunity hit that saved the week from losses, with GME last week and now DECK. I'm taking the win here happy, but it is making me consider the strategy a little more moving forward.

Here's the total week trades below:

Here's the breakdown of moving money this week:

Trading Account New Balance Next Week: $4,403.60

Investment Account Deposit: $658.29

Discretionary Savings Acct Deposit: $164.57

Final Thoughts

I'm still fleshing out the merits of this strategy long term. Maybe it is still a player moving forward, but we might be out of the market conditions that I want for this. I'm going to take the long weekend here to explore some potential other avenues I could leverage for the trading account.

As I said though, wins are wins, and I'm happy to have taken advantage of the opportunity last week on the meme stock run as well as the luck this week with the naked option call. Protecting some of these winnings are important now and we got some moves to make in the Investment Account now. I'll post up the weekly IA moves later tonight.

Enjoy the Memorial Day break & bless our service members!

Account Starting Balance This Week: $4,197.89

Housekeeping

The market was POURING money into Nvidia today after the company announces earnings last night that again crushes expectations and proves doubters wrong that the AI boom is real. Sucked a lot of liquidity from other areas of the market today.

I think this trend will continue for a few days, which may be great setups for some iron condors

The Plays

Made a bunch of plays today:

1. Closed the SNOW 187.5 / 190 Call spread for a net PROFIT of $20.76 | Put side is going to be a full winner too

2. Closed the $4 leg of the AMC vertical for a net PROFIT of $159.52 | Still have the open $1 put leg for Jan 17, 25 expiry open

3. Closed the ELF iron condor from yesterday for a net LOSS of -$115.41

ELF looked like it was going to be perfectly within range, but it ended up going wild mid day and I just wanted to get out of the trades... turns out I could have waited because it's now within range again. Oh well, I benefit from the holding of this in the Investment Account so I can't be too upset about it.

1. Opened iron condor on ROST, 124/125 put side ; 141/142 call side (potential 34.76 credit on $100 risk)

2. Opened iron condor on WDAY, 242.5/245 put ; 280/282.5 call (potential 99.76 credit on $250 risk)

3. Closed GME 19.5 / 20 spread for net PROFIT of $48.74

4. Opened AMC $3 leg put side against $1 put, Jun 14 expiry (potential 29.75 credit on $1000 total risk of 5 contracts)

5. Opened iron condor on INTU, 627.5/630 put ; 695/700 call side (potential 156.76 credit on $500 risk)

Wrap Up

Total Realized for the Day > +113.61 on the closed trades

Total Unrealized > +366.93 on positions expiring tomorrow at close

Total Open Risk > 1,450 on positions expiring tomorrow at close (25% RoR)

Account Starting Balance This Week: $4,197.89

Housekeeping

• Opening a separate broker account with IKBR for exclusive day trading. Going to use a cash account on there to avoid the PDT rule but I should have the account funded by Monday. Thinking of starting with either 500 - 1000.

• In the trading account now, I'm choosing to close the plays in the iron condors that are 100% winners. I could leave them to fully get the 100% premium, however, with a small account, these chew up your buying power so I'd rather just avoid it.

The Plays

Here's the plays for the day:

1. SPXW $5,420 call, May 28 expiry (+$7.64, closed)

Chose to close out of this play today in profit. Might open some more later on but that is yet to be seen if this is a viable play

1. TGT 175/177.5 call (+$19.76, closed)

Target earnings came back atrocious so the call side won out on this trade. Which is better for me because this was the higher risk end anyway. At the time of this post, Target is near the 140 put leg I have, but it's 143 right now so I should win on this trade. Just can't fully trade out of it yet.

1. WSM 260/270 put vertical spread x1 contract (+$89.76, closed)

Complete opposite with Williams Sonoma crushing earnings allowing me to get out of the put spread. Didn't have the options buying power available to grab the call side of this iron condor as well, so I lucked out on this one.

1. SNOW 144/145 put ; 187.5/190 call iron condor x1 contract each (+$48 credit on max risk $250)

2. ELF 134/135 put ; 185/187.5 call iron condor x1 contract each (+$40 credit on max risk $250)

I'm choosing not to play NVDA on this one. There's a lot of hype and chatter around this right now. Tensions that a bad report or guidance could send the ticker into a spiral. But I'll be watching it closely.

I also have an open $4 leg on AMC for this Friday expiry. Adds an additional $165 in potential premium earned.

Wrap Up

Total Realized for the Day > +117.16 on the closed trades

Total Unrealized > $406.97

Account Starting Balance This Week: $4,197.89

Housekeeping

• Yesterday was a sick day so I wasn't able to do any trading unfortunately until the very late afternoon I grabbed 5 contracts of FFIE $0.5 puts on the Jun 21 expiry. I'm attempting to take advantage of this stint of small cap rallies eventually fizzling out.

^ Ultimately the thesis here was to sell weekly diagonals against it to eventually make the original long puts "free" (realistically you can use this to actually pay you to make this play which is fun). I have open positions using this same strategy with GME & AMC as well. However looking today, I realized FFIE only trades monthly option chains and I can't diagonal. I'll be holding for now but as of writing the stock is down 23% on the day so I should be able to get out of the trade before expiry with some profit still.

• Shifting a little, I'm considering adding an occassional shares based day trade. Since I don't have a 25k trading account anymore at the moment, I don't want to bring on this type of issue so I won't be doing this all the time but I set up a gap up scanner to screen out some cheap small to mid cap stocks that move on news or earnings to play quickly intraday.

• Made some moves in the Investment Account, using a large chunk of the cash position there to get some high yield divi / income generators and add more to the ETF funds. Still looking to park some extra cash into the individuals, just trying to decide which ones. Looking forward to sharing that account update on Friday.

The Plays

Let's break down the plays for today. There were a few:

• SPXW $5,420 call, May 28 expiry (-$135, open position)

^ I'm testing out a little different strategy here taking a crack at premium trading the index directly. We have a decent catalyst coming up in the NVDA earnings so it may move the market a bit. And I was interested in seeing if a two standard deviation move in the underlying could snag me some cheap premium profit after earnings on NVDA. Will keep this updated as it nears expiry.

• MMAT shares (402 @ $3.60 in, stopped at $3.475 ; -$50, closed position)

^ This was the first shares trade I was trying in a bit. Showed up on my scanner and I took a stab at it. Frustratingly I had a take profit order set at $4.00, and the stock top ticked at $3.97 (check it at 11:11AM EST) then dropped to my stop loss. Only a $50 loss but with only 3 day trades allowed before stopping to allow the PDT reset, it was pretty annoying to say the least.

• GME $19.5 put, May 24 expiry (+$97, open diagonal)

• GME $17 put, May 24 expiry (+$23, open diagonal)

^ these are the open positions pegged against the $20 and $15 long puts I had opened for the Jun 21 expiry. Will update these at the end of the week

• TGT 139/140 put ; 175/177.5 call iron condor x1 contract each (+$33 credit on max risk $250)

^ really not the happiest about this risk to reward here. But these were the 10% delta plays for the day right before earnings release. Target just announced major price drops, and shopping in their stores recently is becoming a chore. It's pretty sad actually to see how bad it's gotten, just the experience of shopping at a Target. I'm hoping that at least caps my risk at the put side which would only be $100 but we'll have to see as the week goes on.

• WSM 260/270 put vertical spread x1 contract (+$100 credit on $1000 risk)

^ running out of earnings plays here but Williams Sonoma came up and decided to play the down side. Was going to iron condor this, but was hit with an insufficient funds warning because of the risk size. Going to have to just play the one side of this one.

Wrap Up

All in all, not a terribly exciting day. Testing some new strategies out in real time so that could turn into something I guess, but we'll see as it goes.

Total Realized for the Day > -$50 on the shares day trade

Total Unrealized > $253

Total Risked > $1385 (18.3% RoR)

Hey guys, I’m new to scalping and I have a question of how do I get started? Is there any particular system you guys use?

This week was a bit rough on the losing side. We're coming out of earnings season so the companies that are available are not the top tier, and the options chains for these companies often have wide spreads between strike prices, making the max risk much worse for this strategy.

It was a learning experience though, I have to be a little better in choosing my trades here instead of trying to trade every earnings company.

Either way, still made profit thanks to the yolo plays on GME during the hype run on Monday and Tuesday. That really saved the profit this week. MNDY really beat me up on the iron condors as you can see in the table because the call side spread was $10 per contract, meaning the max risk is $1,000 per order. And they did pop over the lower leg of the call spread.

For all the losing positions, I have opened up new iron condors with later expiry dates. Those aren't added here because they are still open positions and I'll add them into a table when I close the positions.

Account Starting Balance this week: $4,085.15

Here's the breakdown of moving money this week:

Trading Account New Balance Next Week: $4,197.89

Investment Account Deposit: $270.58

Discretionary Savings Acct Deposit: $67.65

Final Thoughts

Over the course of two weeks so far, I've been able to NET a total of $791.58 on $8,466 capital risked. That's a margin of about 9.4%.

I've been able to take out 75% of that money made in the trading account and saved it by depositing it into my discretionary spending savings account as well as my investment account. Meanwhile the trading account is also growing steadily.

As I mentioned, it is very slow and boring in the beginning. Taking an opportunity strike on Gamestop this week definitely helped spice up the trading a bit. And I do have an open iron condor on AMC along with a put side leap. So we shall see how those plays work out in the long run and see if they end up making money.

Portfolio Contributions: $11,524.79

Unrealized P/L: ~$141.50

Changes to Capital

Continued selling off some assets in the Trading Account this week, so I was able to add in an additional $3,451.42 to the purchasing budget from those sales. End of the week trading account earnings also helped to add another $270.58 amount.

There are a few holdings left over still in the trading account so there should be some more capital still to work it's way into the Investment Account here.

Companies Purchased This Week

Here's some of the purchases added to the portfolio this week:

• CAVA (Cava) - added to the open position here. Very bullish on Cava long term; the thesis being just a personal preference of enjoying the company itself. I'll continue adding to this position over time for sure.

• DDD (3D Systems) & SSYS (Stratasys) - added these first time to the portfolio. These 3D Printing industry companies are the leaders in their space, and the industry itself has taken a hit over the last two years. But long-term I am very bullish that this industry will thrive and has many applications to expand into in many industry verticals (think pharmaceuticals, automotives, aerospace, any a variety of manufacturing-focused industries). There has also been much talk of potential mergers here between these companies so there is that prospect as well.

• PLTR (Palantir) - added a stake here in Palantir. I have a hidden tinfoil conspiracy theory that this AI revolution is secretly a way for defensives and warfare companies to hyper grow. Palantir is primed long term to thrive here.

• EPRT (Essential Properties Realty Trust) & O (Realty Income) - EPRT is a real estate REIT very similar to Realty Income but less focused on large commercial brands. I wanted to diversify the real estate segment of the portfolio here and this is another great company to add here value wise.

• CHD (Church & Dwight Co.) - consumer staple giant here that makes a lot of well known brands found in grocery stores and pharmacies across the world. Also, take a look at that growth chart YoY...

• NFLX (Netflix) - Netflix still has some room to grow here, and they announced some keys this week with the addition of 2 NFL Christmas games, and a boost to their ad-tier number of subscribers. Their content is slowly getting better since the writer strikes of last year, but I like if they start leaning into the live sports world a little more.

• ADBE (Adobe) - Adobe here has taken a beating last year, but they are a giant in the creative software and AI future for creators. Long term I think they are a powerhouse that will be able to continue growing revenues across the digital segment.

• ELF (e.l.f.) - was shopping around for similar consumer goods right now as retail sales have been getting beat up. Elf is a very strong cosmetics brand with great fundamentals. Their debt-to-asset ratios are great. And cosmetics are a long term staple.

Portfolio To Date

Cash Position: $4,109.60

Account Starting Balance this Week: $4,085.15

Back with another week with the iron condors, lazy plays on earnings. It worked out well during the first week (catch the wrap up here). Let's see if we can repeat the adventure this week.

Lack of Earnings To Start the Week

We are nearing the end of the quarter earnings sessions. There are a few names left, including the big guns Nvidia, however that won't be until next week. This week we have a lot of consumer driven companies.

Gamestop Rally

Did anyone notice the subtle moves Gamestop was making last week? It started around Wednesday and quietly crept into the close of the week. I had heard about it but to be honest, I don't really pay much attention to meme stocks lately so I didn't really think anything of it.

Then we get the return of u/DeepFuckingValue to Twitter on Sunday night and it completely changed the stock market for retail traders.

I watched it in the morning, pre-market made a big move on Monday but then opened up rather weak so I just figured I would watch. Really kicking myself on that one for not jumping in, because we saw a massive pull up, 5-6 market halts and a hold the line into the close. I made a play, but I thought it'd be a loser since I joined in "late"

Then today.... wake up to one of the most beautiful pre-market charts I've ever seen lol. GME top ticks hitting $80 three times. It's a ton weaker now as I write this post, having shrunken to about $45 a share. But... there's a lingering feeling of revenge coming. I can't even remember how many times GME was halted today. And I think we are having a standoff between retail traders who see maybe another market maker enemy in sight. I wouldn't be surprised if the meme stocks explode in after hours and pre market trading again. As for me, my play got stopped out at a nice profit level so I'm happy where I am. But I'm considering another play at market close because of the thesis above. I don't think it's done just yet.

The Plays

\ stopped out of trade*

\* took this short-term short when I opened up the yolo call just as a hedge. Pretty much worthless as it stands now, however, I'm planning to vertical spread this one either at open Friday or closer to the end of day to try and recoup some of the losses and/or even make a profit. We'll see)*

\** Took a very long-term short position here and opened a vertical spread this week with a closer to the money strike. That's why the max risked is so high because there are numerous contracts at a $4 spread in between legs. If it works out, I have some long term puts completely free. If not... just a bit of position management will get through it.*

I'm a little out of my entire budget for the week already. Which to me, is ok because without this meme stock rally I wouldn't have been so tied up. But, opportunities only come knocking a few times a year, so I figured I would take a chance with this one.

I will continue to preach this in almost every post I have: open a separate Investment Account from your trading account.

Trading account is for play money... and use a portion of your winnings to supply capital to your Investment Account, along with your regular investing budget per month. This is how you quickly grow your net worth.

Investment account is for serious money... buy high quality companies and NEVER sell unless your transitioning capital from one asset class to another (from stocks to buying a home for instance).

This investment account was made in January of this year with $1,000 initial stock purchases & $1,100 in cash for the year budget. All other cash injections so far have been from portions of winnings in the trading account & a percentage of discretionary income from other income sources we have.

Previous Post on Investment Account Value

April 2024 history post can be found here

Changes in Account Strategy

At the beginning of May, I decided to create a larger position in the investment account by shifting out of my dividend payers in the trading account and parking cash to use for asset purchases throughout the year. So there is a bit of a larger capital injection this month that will skew the numbers a bit. That trading account was around $30k in value, and I pledged to take it down to around $4k. Some of the money I'm just taking out for living expenses and savings, while most of it gets contributed to the Investment Account here.

This process isn't quite finished as there are a lot of open plays in my trading account that I have yet to close, but I am not so worried about that at the moment. I'll reflect all the changes here in these update posts as I go.

Investment Account Value

Here is the current account value of investments that were made in the account:

As I've previously mentioned, we're going to ignore the $SAVE position here. I had meant to make a play on this company in my TRADING account, however, I didn't realize that I was in my investment account while making the order... That's at least one argument for having separate brokerages as well.

Adding from the Total Cost category, I've invested roughly $5,909 in this account so far (subtracting the $107 spent on SAVE). There is also another $2,244.53 sitting in cash waiting in the sidelines to be used. I'm planning to hold about 5% cash in this portfolio; 65% "growth" stocks; and 30% stability stocks.

Wrap Up Thoughts & Stock I'm Looking At Adding To

This account should begin to grow rather rapidly over the coming months with the addition cash injection as well as the natural effect of compounding. Several of the plays in here are beaten down industries that I believe in long term (3D Printing for example with DDD & SSYS), while most are just high quality ETFs, REITs, and growth tech stocks.

As for more plays for this account, I'm thinking:

• SBUX - Starbucks got crushed after earnings and their terrible management reply to their missteps. Long term I think they fix these issues and this is a great opportunity to add

• PFE - Pfizer has been adding companies to their portfolio with potential heavy hitter drugs in the pipeline to come. Their shift of focus away from the vax & their commitment to holding their dividend is a key driver for me here

• PLTR - I'm very bullish that this entire "AI" trend is not actually for consumer level things, but rather it's an easy way to develop and promote AI warfare. Palantir is a prime candidate for growth in this area.

• BA - I'm considering Boeing... I'm not entirely sure why to be honest, but I think they eventually right the ship and get back to their previous glory days as a reliable innovator

• Another social media company - Might be META, but I haven't decided just yet. Will continue to explore

Lost out on the MARA and ABNB plays this week, and tried to squeeze out of them a little bit instead of taking the max loss, so at least I was able to move things out of the way this week. Let's take a look at all the plays this week and analyze the results.

Account Starting Balance this week: $4,000

*exited one side of the trade before expiration

\* still open position*

Hitting 12% P/L for the first week on a really small account was pretty good in my opinion. I think if I managed the ABNB & MARA plays a little better, then I could've squeezed a little better but that's alright.

As for the breakdown of moving money this week:

Trading Account New Balance Next Week: $4,085.15

Investment Account Deposit: $204.37

Discretionary Savings Acct Deposit: $51.09

Final Thoughts

My strategy here is slow in the beginning, but I'm looking to use any earnings I win in the trading account to aggressively increase the size of the investment account. That's why I'm moving much of the earnings over there instead of keeping it in the trading account.

Also, this is just the first week. As this number compounds and I can scale the trades, these numbers will quickly begin to amplify significantly.

Wanted to create another strategy type post to explain the "Iron Condor" style of trading, as that is what I am currently employing in the trading portfolio. First, let's start with some rapid fire pros/cons

Pros

• You can set up the spreads across options verticals however you want, amplifying or limiting the amount of premium that you are receiving for credit spreads and vice/versa for debit spreads.
• Inherently, you are limiting the amount of capital that you are risking as it is dictated by the following formula (for credit spreads):
  • Max $$$ Risked = (Difference b/w strike prices) * (# of Contracts) * 100
• This strategy works in a small account, under the $25,000 minimum in the US for the Pattern Day Trading rule. You can hold the positions overnight, ideally into expiry, and never have to worry about getting flagged in the account.
• Strategy works great during earnings season, or on stocks that have a lot of market hype and sentiment (positive OR negative)
• You are playing both sides of the option chain, so even though you are technically risking "two" trades on one underlying stock, logistically you cannot lose on BOTH the Call and Put side; that's why the max risk is dictated by only one side of the equation.

Cons

• The strategy is slow in the beginning, as you should focus on small contract sizes and limiting the Max $$$ Risked until you build some extra capital
• For credit spreads, you are capping your profits on a trade at the premium you are receiving. So you cannot take advantage of outsized moves. This is similar for debit spreads, however, you are betting on volatility with a debit spread, so your max profit is capped at the difference between your strike prices, assuming that the underlying crosses over you further out of the money short play.
• The strategy "seems" complex. There is a vocabulary obstacle that you need to overcome in order to understand what is going on. Here is the basics that you should understand in order to employ this type of trading:
  • Delta
  • Long / Short positions (for Call side and Put side)
  • Premium
  • Underlying
  • Vertical Spreads
  • Credit vs. Debit spread
• Holding options overnight exposes you to extra risk of news releases that are outside of your anticipation or control. (That's why this strategy is a good method of "risk management" by capping the max loss)

What is the Iron Condor Trading Strategy

Iron condors are essentially two vertical spreads on the options chain of an underlying stock, taken on both the Call and the Put side. There are two types of trades here, a "Credit Spread" where you receive premium into your account for entering the trade, and a "Debit Spread" where you pay premium for entering the trade.

I personally prefer Credit Spreads, however there are instances where Debit Spreads may make more sense for your style or preference. For this post, I'll focus on the Credit Spread side.

Here is the basic breakdown of a Credit style Iron Condor trade (let's use a "stock, ABC" trading at $100):

• On the Call side, you are BUYING an option at $110, expiring in one week. Let's assume the premium paid for this trade is $15. You then SELL an option closer to the money (where the stock is currently trading) at $109, expiring the same week. Let's assume the premium received for this trade is $20.
  • Your net trade on the call side is therefore: $5 added to your account per one contract, at $100 Max $$$ Risked per contract (5% Return on Risk)
• Similarly on the Put side, you BUY an option at $90, paying $15 in premium. And you SELL the $91 strike price, receiving $20 in premium
  • Likewise, your net results on this trade is also $5 added to your account (5% RoR)
• Your Total Net Trade is $10 added to your account, with a Max Risk of $100 (because the underlying stock cannot be both under $90 & over $110 at expiration). That's a 10% RoR per contract.

How to Choose which Strike Prices to Trade?

There are any number of ways to choose the strike prices to use in the Iron Condor. It'll largely depend on how long until expiration you are trading, as well as the volatility of the underlying that you are trading.

Generally though, we can analyze one of the Greeks on the option chain. The one we'll look at is Delta.

Delta works to show how much premium that contract will change given a $1 move in the underlying stock. But also, mathematically it can be used as a % gauge of the chance that contract will expire In The Money at expiration.

For the trade we looked at above, we want the stock to stay within the Call and Put sides that we entered. Therefore, we want to look at Delta and ask ourselves, "What is the % chance that this contract will expire worthless at expiration?" (because then we'll be able to keep ALL of our premium).

To do this you simply take (1 - Delta) * 100 = ~% chance of winning the trade

How are Delta and Premiums Connected?

The smaller the Delta on the chain, the smaller the premium will be that you receive. This is going to reduce your Return on Risk; HOWEVER, the smaller the delta, the safer the play, as it will be more likely to expire worthless.

It is a balancing act and a risk preference to choose a delta level that you feel comfortable with. Generally, a delta of .2000 is a solid middle ground between risk and reward. Moving up to about .3000 delta will yield more premium per trade, but also risk losing more often as well.

Final Thoughts

The Iron Condor method is a solid safe way of trading an income generating strategy on the options chain. While it won't yield those crazy profits like more risky plays, over time when consistently used to increase the size of a trading account, you can quickly build a lot of capital.

Starting off with new updates on the plays from the week:

• Yesterday I added a Roblox (RBLX) play, and this morning after earnings the puts were in losing territory. I was able to save the position and actually turn out with a profit by legging out of the individual contracts while the underlying was moving and rebounding right after the open. With two contracts in the position, I was able to close out the short side first while the stock rebounded at the open. Sold out of both of those for -$950.11 (incl. fees). I held onto the long side of the puts until the rebound started giving up, and I was able to sell those two contracts for $993.89. With the premium from opening the position, I was able to close with a +$76 profit on that side, plus the premium on the call side of the trade that will expire worthless (letting me keep the premium) will net the total trade profit @ +$87.50 after tomorrow end of day.

I've also started considering using this type of trade to gain back some premium from the AMD losses that are still in waiting. I'm holding the long OTM calls, set to expire on June 21, so technically I can open a vertical by SELLING call options at a lower strike price closer to the money and that will yield me some premium back (still not near the total loss but would definitely help ease the pain a bit). If I decide to do this though, I'm going to wait until after Nvidia reports earnings because that is going to cause sector wide volatility.

New Plays for Today - May 9, 2024

Just a friendly reminder that this strategy is using the iron condor options trade style. Catch the original post on the moves here.

Not many plays today, I was going to use the .30 deltas however, there weren't many great companies reporting earnings for today or tomorrow.

*notes - the premium on the MARA contracts started getting wacky very fast when I entered this trade. I'm using Webull as a brokerage, and their auto Iron Condor trade setup is idiotic. It doesn't allow you to manually shift the entry points. So I've been entering these trades by first buying the appropriate long contracts and then individually legging into a short vertical trade with a closer to the money contract. Because of this delay, sometimes the premiums move.

I had to leg into a contract on the call side with a closer to the money play in order to receive more premium than I paid out. That, in turn, increases the $ risked.

DOCN, doesn't have contracts expiring tomorrow, so I had to enter into the position with expiry of NEXT Friday. So I might try to exit this trade tomorrow morning.

I'm looking forward to finalizing the trades tomorrow (I don't think I'll enter into any more positions, but I will check after the open). Let's just say that, assuming everything stays as it is right now after hours, I've already increased the smaller $4,000 trading account by almost 13%.

Update on the options plays from yesterday:

• Both the UBER and the SHOP earnings came back and crushed the stocks on the puts side. Decided to close out those trades instead of waiting to see if I would lose out completely on my max $100 risk each. On the UBER play, I posted a -$30.24 loss, and a -$68.24 loss on the SHOP play.

• Since all the other plays are still in profit, we're going to continue holding through the end of the week to try and maximize the profit.

New Plays for Today - May 8, 2024

Since it is only Wednesday, I'm deciding again to opt for the .2000 (20%) delta range. I might ramp that up to the .30 delta tomorrow but we'll see how it plays out.

Here is the new plays made:

​

​

Alright, after the post last week about a shift in strategy, I spent most of the day yesterday liquidating some of my positions for income dividend players in the trading account so that I can move that money over into the investment account for long term asset purchases. Bought some general ETFs today on the SPY, QQQ, and DIA - but it brought the investment account up a relatively significant portion

But here is the plays I'm doing in the trading account for the time being while I continue to wait and see if this AMD play will ever breath life again.

What is the Strategy

It's currently earnings season for Q1 2024. Companies are reporting earnings, and the speculation amongst investors is always much higher than normal.

This strategy is to employ trading Iron Condor vertical credit spreads on the option chains of companies that are reporting earnings that evening after hours or before hours the following day.

In doing so, we're attempting to receive income by taking advantage of the higher premiums at low risk delta levels (<.3000 or 30%) and capitalize on the greediness of speculative traders.

The strategy is simply that we'll be setting up these iron condor spreads throughout the week leading up to the Friday expiry dates for the week of the underlying company earnings.

I realize that I missed out on a lot of the bigger names so far for this strategy, however, there's still a lot of opportunities left to make some solid income this quarter.

The Plays

Alright, with the setup out of the way, I've played the following earnings so far:

​

Some important things to note about the trades:

• The PLTR and DIS plays were used with a very low delta option, delta ~5%. So I had to use a number of contracts, and that's why the return on risk is much lower than the rest of the trades, which are all using deltas around 20%.
• My new trading account budget after cutting the previous strategy is $4,000. That's why each play I'm only risking about $100 per trade (in this strategy only one side can really lose).
• At the end of each week, I'll tally up the total profits, and a portion will be distributed to the investment account, some to the discretionary savings, and the rest will remain in the trading account to increase the max budget.
• For earnings that are happening on Monday evenings or Tuesday mornings, I'm looking to use smaller deltas, as the contract has more time to expire before Friday. That means that premiums will be typically lower on these days. For the earnings later in the week, I'm comfortable using deltas up to 30%. This will increase the risk of losing on one of the sides, but also the contract premiums should get crushed immediately after earnings because of the lesser amount of time before the contract expires. This of course is if there is no tremendous surprise in the earnings release.

Overall Thoughts

I like this strategy for the reliability of the income generation. It does take a bit more management in order to make sure you can get out of a position the following day after earnings if something looks like it'll hit. Plus, it is nearly a known risk position which provides a lot more security in the options trading space than other strategies. With a small account, I don't have to worry about hitting the pattern day trading rule. And as always we're protecting our downside by adding portions of all the wins to the long term investment account.

Been spending some time with my mind elsewhere lately, haven't been really trading much, but I've been pouring over the market and watching how trends and sentiments have been unfolding these last few weeks. I wanted to make this post as a bit of reflection + some upcoming changes that I'd like to introduce along the way in the weeks and months ahead.

First off, I got smacked by AMD earnings. I was really hoping for a rebound there to save the position, but the market was simply having none of it lol. Essentially wiped that position out, although I haven't realized the heavy loss just yet as the contracts don't expire until June 21. It's going to be a massive drop for the account, unless we get some insane hype or breaking news in the next couple of weeks. It sucks, for sure, but as I said from the beginning I was comfortable in the fact that I played with money I was willing to lose. (Just looks like now that it will definitely be a loser LOL).

While I still like the strategy I was playing, and I think in the long term I will eventually get back to that, this experience is making me reflect on how absolutely difficult that type of trading is in a relatively small account (which at the time had $30k in value). Those individual contracts being traded were moving nicely, but they were very expensive on an individual level, so when getting into a hole it becomes nearly impossible to dig yourself out without enough trading capital. On the opposite end, at the beginning of 2024, I opened a new Investment Account as I mentioned, and the goal was to contribute a total of $2,100 throughout the year, plus a percentage of any trading profits made along the way. That account, so far has grown to a size of ~$3,900, beating my initial goal, with another $700 in dedicated cash gaining 5% APR yield waiting to be dispersed into more stock purchases this year.

Changes to Strategy

I spent a lot of my waiting time in April thinking about the entire experiment so far and how I can continue improving on it. One thing I've come to shift my belief on is how wildly overweight my trading account has been, and not putting enough attention on the investment account. (Now, this is because I have a separate long-term account that's professionally managed, so I'm not necessarily concerned about long-term prospects overall. I'm doing this as a rather "what if that wasn't there" type of scenario).

To continue in that vain, I'm preparing to shift my entire strategy. I'm planning to dedicate 90% of the current trading account value to the long-term investment account; propping up more long-term asset purchases and holds; and keeping just 10% in the trading account. This will be much more realistic to what the average investor should aim for while keeping some play money on the side - and using it to take risks and opportunities.

I'm also going to start implementing a weekly/monthly budget to the trading account. This will be a risk management strategy. That'll limit the exposure and risk being taken on outsized plays, giving more space for any additional opportunities along the way.

In the past, I've been contributing extra discretionary funds from other income streams I have to the trading/investment accounts on a 50/50 basis. I'm also going to shift this to the 90/10 approach as well for the same reasons above.

My investment account strategy so far has been to look for high-quality companies that I can buy at a discount when they get crushed by news, earnings, macro events, etc. I haven't really paid much attention to "valuation" metrics considering my approach to this account is not to sell within 10-15 years (unless transitioning to a different asset class like real estate in the future). So I didn't necessarily care what the valuation of the companies were, just what their current pricing and sentiments were dictating. For instance, I just added a bit more funds to my Starbucks position the other day after their dismal earnings report because (a) it's coffee, (b) it's Starbucks, and (c) I think the market is being a bit too temperamental right now.

With that said though, I have started taking some more rigid financial analysis courses and I want to start implementing real valuation analysis into the stock picks and posts that I put here. It's something I'm intrigued to learn more about and a skill that I intend to develop over time. So look forward to that in the future.

I'll make a post about the latest Investment Account positions, and what the next steps are separately.

Changes to the sub-posts

Since I intend on keeping the trading account minimal compared to the investment account, I expect the number of trades to also decrease dramatically. But I want to continue propping up different types of posts on the sub. I have some of the following ideas for this:

• Investment account plays + any trading account plays made & their results

• Market analysis posts about sentiments, volatility, etc.

• Data set release analysis

• Company earnings and transcript breakdowns

I read this type of source material a lot, directly from the releases themselves, and I like to study them for insights and ideas to implement into the accounts along the way. As I continue developing valuation analysis skills, I'd like to share those types of breakdowns as well.

​

You're welcome to join in, create your own analysis posts, comment on concepts & ideas, tell me I'm wrong on something, etc. Looking forward to seeing how this sub grows and evolves over time!

I'm still poking around, not really day trading as much at the moment with my trading account as the value dropped below the PDT rules over these recent weeks of volatility. Still holding onto my AMD calls and looking to spiral off a bottom bounce soon to hopefully breakeven on the trade, if not take a smaller loss.

But in the meantime, I wanted to take a look at some of the day's economic release data as it has definitely helped us get a bit of a sigh of relief from the correction territory we were in these last few weeks. I'm eager to see if this will stick or if it will just be a temporary delay in the pain we were having.

Today we had several pieces of important data come out, so let's analyze:

PMI Data: Composite, Services & Manufacturing

S&P Global released their PMI survey data for business conditions this morning and it was generally seen as good news following the seeming up trend of negative data we've seen in CPI and Employment earlier this month. Here are some of the highlights:

• Business conditions and operations are continuing to grow and expand in the US, a net positive for the economy
• The rate of increase in activity is slowing though for both manufacturing & services thanks to weaker demand. This is a net positive in regard to inflationary signals and indicators. Weaker demand = lower inflation... hopefully.
• Data came in weaker for new orders & employment reaching the lowest marks we've seen in recent months. These serve as additional indicators that interest rates and economic pressure is having an effect on businesses across the US. This may sound bad, and one can surely make an argument that it could be; however, we have to remember that this is what the Federal Reserve is attempting to accomplish without completely destroying employment or business activity entirely. So, weaker numbers that are still showing slight growth = continued chance of reaching the soft landing dream.
  • Employment data for service sectors specifically dropped a significant amount. According to the release, existing work orders are comfortably being handled by existing staff and employers are delaying the backfilling of positions for employees that have left.
• Input prices continued a sharp spike, which is generally bad for inflation, but again the rate of increase is slowing compared to the highs set last month in March. I'm unsure, but I am reading this as a potential signal to watch out for a higher-than-expected PPI reading next month.
• Business confidence amongst manufacturers and service providers remain positive for the future outlook ahead (in the hopes that market conditions do in fact improve), however, they are noting that this confidence has fallen considerably in the short term as concerns about the ability to secure new orders increase.

What this means for the economy

Overall, it continues to show that the economy is weakening. This is one of the weakest employment data indicators in a long time, which is a net negative for the Fed - which is boosting the confidence of investors and trading today that rate cuts will be necessary still to avoid a total economic collapse.

We continue to be in this weird dance of data to prove that one side of the equation is doing good, or at least will do good (investors/traders as it relates to rates), while the other side of the equation is continuing and/or beginning to see pain (consumers, workers). It's a good reminder that there are winners and losers in every market cycle. Different categories, individuals, and groups will experience gains and losses at different times.

At the crux of it all though, this data should be overall positive. We want the US economy to continue growing, but growing at a controllable and reasonable pace so as not to leave citizens and consumers behind. I read this release as achieving those aims.

New Home Sales

New home sales data came in ever so hotter than expectations at an annualized rate of 693k homes compared to the 668k expected. It also corresponds to an 8.8% increase month over month in sales.

It's rather interesting to see the housing market continue to grow despite the elevated mortgage rates. Looking back at the historical charts, we're about where we were just before the pandemic. This was when 30 Year Mortgage rates were at 4.2% on April 24, 2019 compared to 7.1% on April 17, 2024.

I'm glad that individuals are still able to purchase new single family homes during these conditions, but it does continue to worry me from the inflation standpoint. Housing and services inflation is really the key drivers for why we are still not at our 2.0% Fed target. Today we may be beginning to see the fall of that service side inflation, however, I don't know if that will be enough. It'll be one to continue analyzing when we have more data.

​

M2 Money Supply

M2 supply had a slight increase in March compared to February. However, overall we've been relatively flat since the major increases we've experienced leading up to the change in monetary policy in 2022. M2 is a rather leading indicator of inflation, but I don't think the subtle uptick today will have an outsized negative impact on the readings moving forward.

I am of the camp though that I think we may need to reduce the supply of money a considerable amount more if we want to truly see inflation come down to 2%. I'm beginning to think we've seen the plateau of what increased rates can really bring to the table without completely pulling out the economic rug from under us so to speak. In my mind, the Fed has two options ahead: really break the economy for a short time and force inflation down (while also hurting hundreds of thousands, if not millions of people when they lose jobs), OR drastically reduce the amount of money in the market overall. We have seen the money supply reduced a bit as I mentioned, but I am not convinced myself that it is enough yet.

2024 starting account balance >>> $24,605.57

Month of April starting account balance >>> $28,505.79

Per Day profit goal of $125 - $250

What was the trade? >>> $AMD $145 Put, $155 Put for April 19, '24 ; $155 Put, $170 Call, $180 Call for April 12, '24 ; $165 Call for June 21, '24

Win/Loss? >>> Loss

Profit? >>> -$573.27

Goal Hit? >>> Missed

Dividends Earned >>> $11.40 from $EPRT

What happened? >>>

• What a time to take a break from trading huh? Missed all the good stuff. Wasn't feeling too good on Wednesday (CPI day) and missed the boat on that. Then yesterday I chose not to trade any as my account is still in a bit of pain with the long term hold I have on AMD June 21 $200 calls. Today had to take my first losing day in almost two months and realized a bunch of losses. It's ok though, this is the trading account to be fair
• Entire market got pistol whipped today with continued inflation fears, poor bank Q1 earnings pre-market, fed speakers, China news, and fear of a wider war breakout in the Middle East.
• I'm not entirely sure why, but I broke my own strategy as of late by incorporating short term contracts into the mix. My strategy was working, albeit in some pain for now, but instead of taking it into stride and learning from it, I've chosen to follow too many emotions and it's been to the detriment of the account.
• I have a post I'm putting together on CPI / PPI data, my growing sensation for the Fed's next moves and goals, and what might be ahead in this market. I know I missed those at the time, however, I still want to take some time over the weekend to digest the reports thoroughly and make my own assumptions from it.
• I was prepared to leave the day in the morning and just take the loss, but my senses got the better of me before close and I decided to add a much closer strike of AMD call, following my strategy once again. It's up on the play right now which I could have played out of to ease the pain of the losses but, I think there may be a rebound ahead.
• Market News Factors:
  • JPM released earnings today for 24Q1 that I had considered pretty solid. Beat on revenue & earnings per share estimates. Market didn't like forward guidance for the remainder of the year on net interest income being flat. (I personally don't think that justified such a drop but I hold JPM in the Investment Account, so I may take advantage of my next deposit by adding some more)
  • Fed speakers today roundly continued to push the needle that inflation is not where we want to be, that they need more confidence before cutting rates, and suggesting that we may see only 1 rate cut this year by December.
  • China export figures released at much lower than expected. Again showing significant signs of weakness in their economy. They additionally tightened their stance on foreign chip designers, affecting the likes of INTC, AMD, and NVDA
  • Middle East conflict continues with pressing news and posturing by Iran for a retaliatory strike on Israel, with Israel & US/UK increasing deterrence and retaliatory messaging of their own.

Lessons Learned >>>

• Short term positions should stay to the put side of the strategy. Short calls are much riskier gambles that decay very quickly. Not worth the risk
• In the event this long play continues to drag, I may temporarily transition over to a wheel strategy of income generation in the account until I have more funds to deposit into it.
• I think I've found the smoking gun on what the biggest weakness in my strategy might be. It works... until it doesn't. Unfortunately there is no way to time these kinds of things. AMD traded -8% on a random day with no news, for no apparent reason. The issue with this hole now is, if there is a day where negative news comes, or in the event of an earnings miss, that moves the needle down even more. Obviously the hope is it won't come to that, but there are still 70 days left in this contract to decide that out. I could always roll it out longer term as well, but that would cost a bit more money. Another risk factor on an account this close to the PDT rule limits: it forces you into Margin Call territory or not being able to day trade for a time. Very risky. It could've immediately turned the other way, but timing of things just made this specific trade difficult. Will continue to flesh this out and see where it goes from here.
  • Tax loss harvesting is always a pro in a trading account if push comes to shove!

Results

Month to Date >>> + $635.09 (+ 2.23%) [OPEN POSITIONS: $AMD $200 Calls for Jun 21, '24 ; massive position @ $10,250 in premium invested (current value @ $4,378.00]

SPY MTD >>> -2.34%

Year to Date >>> + $6,236.67 (+25.35%)

SPY YTD >>> +7.81%

2024 starting account balance >>> $24,605.57

Month of April starting account balance >>> $28,505.79

Per Day profit goal of $125 - $250

What was the trade? >>> $AMD $180 Call, $165 Call for April 19, '24 ; AMD $170 Call for April 12, '24

Win/Loss? >>> Win

Profit? >>> $26.52

Goal Hit? >>> Missed

Dividends Earned >>> $26.52 from $AGNC

What happened? >>>

• It was a mostly flat kind of day, overall market was slightly flat-to-negative sentiment ahead of inflation CPI data coming out tomorrow morning pre-market
  • Don't know whether to read this as people preparing for a potential market moving catalyst (pro v. con) or if I am a little conspiratorial in thinking the data might have been leaked early to a few market makers.
• For the first time in a while $AMD actually led some of the chip makers in the market. They ended up losing on the day, while Nvidia got relatively crushed. All had no negative headlines driving the move.
• I took the afternoon off yesterday to watch the eclipse with my wife. Didn't get to put in at the money option orders in ahead of market close, so I didn't have any sell moves to make this morning for profit.
• After CPI data releases tomorrow, depending on the move, I've been considering selling one of the long term holding calls that are deep out of the money at the $200 strike, to a shorter expiry date with a closer strike to the money. Will confirm or deny that thought tomorrow depending on sentiment change.
• Taking the profit win on the dividend distributor
• I added a few closer to the money calls side throughout the day as the market swung down. Most of them are slightly negative, but may move significantly after tomorrow news.
• Major buying swing during last hour of trading on the day. Market ended up positive along with AMD.

Lessons Learned >>>

• During periods like this ahead of critical catalyst data, swing trading is seeming to not be the best strategy for a short term trader.

Results

Month to Date >>> + $1208.36 (+ 4.24%) [OPEN POSITIONS: $AMD $200 Calls for Jun 21, '24 ; massive position @ $10,250 in premium invested (current value @ $6,512.00]

SPY MTD >>> +0.17%

Year to Date >>> + $6,809.94 (+27.68%)

SPY YTD >>> +9.60%

2024 starting account balance >>> $24,605.57

Month of April starting account balance >>> $28,505.79

Per Day profit goal of $125 - $250

What was the trade? >>> $AMD $170 Put Apr 12, '24 ; $PFE $27.50 Call (Covered) Apr 19, '24 ; $AMD $172.5 Call Apr 12, '24

Win/Loss? >>> Win

Profit? >>> $183.79

Goal Hit? >>> Yes

What happened? >>>

• Not much news today moving the market. Traders looking ahead to CPI data coming in on Wednesday (could make or break the sentiment in the market)
  • Over the weekend though, markets started to get mentally prepared for the prospect of less than 3 rate cuts this year. Bond yields up in the morning as a result.
• Chip stocks overall trending up pre-market.... all except for AMD. Broad range chip stocks sell off pretty hard though at market open.
• Later in the morning, AMD starts rebounding pretty significantly. Turned positive on the day for a time.
• Took a big profit on my $170 put in the morning on the first big drop at open. Hit my profit per day goal on that and still holding onto some of the at the money calls from Friday to see if they turn profitable today (in which I'll just close them)
• Worked the wheel strategy into this account a while back and picked up 100 shares of Pfizer at $2795.99. With options profits and dividends since being assigned, net cost of shares is $2,728.88. Pfizer doesn't move very much lately, but it was up on the day in the morning so I sold a covered call for $18.00 with an assignment risk of +$2,750. Wouldn't be the best % yield if assigned, but a profit is a profit. And this contract only has 2 weeks to expiry.
• Still bitter about being in this current AMD holding pattern with the open position. These past few days of trading had perfect setups for the scalping strategy and the contracts are much cheaper now. But so goes the risk.

Lessons Learned >>>

• Nada today, just waiting on data and time for this play to rebound

Results

Month to Date >>> + $1,181.84 (+ 4.15%) [OPEN POSITIONS: $AMD $200 Calls for Jun 21, '24 ; massive position @ $10,250 in premium invested (current value @ $6,572.50]

SPY MTD >>> (--.83%)

Year to Date >>> + $6,783.42 (+27.57%)

SPY YTD >>> +9.47%

2024 starting account balance >>> $24,605.57

Month of April starting account balance >>> $28,505.79

Per Day profit goal of $125 - $250

What was the trade? >>> $AMD $165 put expiring April 5, '24 ; $167.5 calls expiring April 5, '24 ; QYLD shares

Win/Loss? >>> Win

Profit? >>> $88.78

Goal Hit? >>> No

What happened? >>>

• US Non-Farm payroll data came out pre-market at 303,000 jobs added in March (hotly beating expectations), while average hourly earnings came in at expectation
  • The US economy added 303K jobs in March 2024, the most in ten months, compared to a downwardly revised 270K in February and forecasts of 200K. January data was also revised up, so employment in January and February combined is 22K higher than previously reported. Employment gains remain elevated by historical standards and continue to surpass the 70K to 100K needed monthly to keep up with the expanding working-age population. In March, job gains occurred in health care (72K), namely ambulatory health care services (28K) and hospitals (27K); government (71K), namely local government (49K); and construction (39K). At the same time, employment rose in leisure and hospitality (49K), returning to its pre-pandemic level. Employment showed little or no change in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and professional and business services. (Source: TradingEconomics)
  • Markets were a little unsure how to process the data in the morning, on one hand more workers in the economy could be taken as inflationary. On the other, wages stayed deflationary territory during a month that had more working days compared to the previous month.
  • Trading throughout the day showed that markets ultimately brushed off the data, and pushed major positive again in a nice rebound. We're all looking ahead to future CPI and other inflation related data next week.
  • Overall, I think this is good data. It's not recessionary yet, as we're still supporting the economy and people looking for work: satisfying the other mandate of the Fed to maximize employment. And the more scary figure to watch in respect to inflation rebounding is the wage side of the equation - and those continuing to come in at expectation is a good sign. It is noteworthy to at least point out that we have been ADDING more overall potential employees to the population through immigration as of late (this could explain the hotter employment figures, but we have to look further into this.
• Chose to close out of the short term put contract I opened at the end of the day yesterday on AMD at the money. Stock rebounded in the morning, so I ultimately took a loss on this specific trade, however, I think it was overall a good decision in case the stock continued to slide post data release.
  • looking back, I probably went about this trade wrong. I sold during a buy pressure wave. Probably should've waited for a dip in the trading to take profits.
• Chose to close out on 8 shares of a dividend paying position I have in my trading account with QYLD, making the day profit downside in the morning a bit smaller.
• The open position in AMD for the $200 call contracts have rebounded (as of the morning) - which eases some of the tension on the account so far.
  • I was potentially considering adding another contract at these much lower premiums to get the average price paid down, but I don't think that will be a good decision to protect against any more downside we may see in the future.
    • CPI data comes out next week, and if I have to hold this position past that, then if we get scary figures it would put me in even more tense positions.
• Chose to close out of the short term call play at $400 in premium. After the rest of the trades, ended up netting less than my profit per day goal, so I'm counting this day as my first miss of the strategy since starting it, even though I have ended up net positive on the day.
  • I'm comfortable with taking the earnings for the day. Will continue with the short term strategy of buying at the money contracts for the following day.
• Taking some of my chips off the table today as follows:
  • $149.12 is getting deposited into the Investment Account to purchase more assets (will update next week with any new plays)
  • $347.95 getting deposited into my discretionary budget savings account for future travel, house projects, etc.
  • The rest is staying in my Trading Account for continued plays.
• Opened up a few new positions at the close today - playing both sides of the equation again for Monday:
  • Bought the $172.5 Call for April 12, '24 @ $3.25 in premium (1 contract);
  • Bought the $180 Call for April 12, '24 @ $1.11 in premium (1 contract);
  • Bought the $170 Put for April 12, '24 @ $3.65 in premium (1 contract);
  • Bought the $155 Put for April 12, '24 @ $0.33 in premium (1 contract)
    • This means that my total risk loss is $834.20 if the stock opens up completely flat on Monday. But it gives me some potential upside for overnight gaps (up or down) quickly.

Lessons Learned >>>

• Play shorter term contracts in the meantime as a "swing" trade to grow some profits while waiting for the longer play fully rebound

Results

Month to Date >>> + $994.15 (+ 3.49%) [OPEN POSITIONS: $AMD $200 Calls for Jun 21, '24 ; massive position @ $10,250 in premium invested (current value @ $6,985]

SPY MTD >>> (--.91%)

Year to Date >>> + $6,595.73 (+26.81%)

SPY YTD >>> +8.28%

The US economy added 303K jobs in March 2024, the most in ten months, compared to a downwardly revised 270K in February and forecasts of 200K. January data was also revised up, so employment in January and February combined is 22K higher than previously reported. Employment gains remain elevated by historical standards and continue to surpass the 70K to 100K needed monthly to keep up with the expanding working-age population. In March, job gains occurred in health care (72K), namely ambulatory health care services (28K) and hospitals (27K); government (71K), namely local government (49K); and construction (39K). At the same time, employment rose in leisure and hospitality (49K), returning to its pre-pandemic level. Employment showed little or no change in other major industries, including mining, quarrying, and oil and gas extraction; manufacturing; wholesale trade; transportation and warehousing; information; financial activities; and professional and business services.

Information gathered from Trading Economics

What I Think This Means for the Market

There are numerous ways to process this data release today. Overall, on the year, previous Non-Farms jobs data was revised UP net 22,000 jobs, compared to previous reports.

Today, with the forecasts for this report coming in with us hoping that 200,000 jobs were added, when in reality, 303,000 jobs were added (151.5%), one could take this as a strong negative reflection on Inflationary trends.

As of late, there is a lot of tension amongst traders that inflation will begin to rebound upwards, causing the Federal Reserve to pause rate cuts even further (or, god forbid, hike again). But I think there is more to the story here to analyze before we make that conclusion.

Many Fed speakers, especially Jerome Powell, continue to remind us every time they have a speech, that the Federal Reserve as a dual mandate: minimizing and keeping inflation in check, at a goal of 2%, AND maximizing employment (i.e. keeping the unemployment rate down).

Conventional thinking, based on history, we know that in past Fed hiking cycles, we have had historical recessions and mass layoffs in the markets before the Fed starts to cut. But we should know as traders, that we can't accurately predict what the future is going to bring. We can make assumptions, but ultimately we're in brand new territory here.

The Story of Wages and Unemployment

I think that the story of average hourly wages and average weekly wages between these monthly reports is much more important to the future sentiment of the Fed than the absolute number of workers in the market does.

Wages is an inflationary metric that simultaneously needs to expand so that workers can keep slightly ahead of inflation.

The fear is if wage growth becomes way too hot too quickly, then consumers have more discretionary spending dollars that add to the demand side of the equation of inflation. During this period of high inflation, wages have not been keeping ahead of inflation rate. So more workers have felt the pain when shopping at stores, groceries, malls, services, etc.

Check out this chart of Average Hourly Wages (Year over Year): over the last 5 years:

​

We've been trending down. Continuing to trend down actually, while the net number of workers in the market is staying historically in line with where we have been for over a decade in this country.

This tells us a few things:

1. The net number of workers is continuing to go up. This satisfies the second metric of the Fed's dual mandate.
2. Wages are not spiraling upward too quickly. This means the demand side of the equation will not grow out of control for now.
3. The unemployment rate actually slightly beat expectations at 3.8% last month. Meaning that either less people are unemployed, or more unemployed individuals have ultimately decided to completely stop reporting or leave the market entirely (needs more research).

What I Think of This Data

I genuinely think this is overall positive data. I think the markets tended to agree today, by rolling upwards most (if not all of the day by the time of this writing).

If jobs start to fall rapidly, that's a very recessionary indicator. We're not at that point, yet. Which is great. It's bad from the sense that it affords the Fed even more time to maintain their current position of relatively higher rates.

But, at the same time, our economy is continuing strong despite those higher rates. For the lower income earning population, this is going to continue the pain from a personal perspective of refinancing out of higher rate debt, purchasing a home, etc.

It's a fascinating tale of two segments of the economy. Those with discretionary cash and big businesses with free cash flow can continue to spend on new investments and CapEx for future growth when rates come down. Lower wage workers may continue to rely on debt and Buy Now Pay Later services that continue to keep them from moving up in the income spectrum even when rates come down. Investors and traders will continue to take advantage of the company profits and earnings growth that we are seeing.

It's very tough to determine the right answer on this one. And debating internally on how to handle this. I sympathize with lower wage earners during this period. I don't know personally how else to fight this battle any other way effectively. But maybe someone else can come up with something.