Trade Findings and Adjustments 10-17-2024
What’s going on in our market?
- Setting new highs and still bullish
- Risks:
- Hurricane Helene and new hurricanes hitting our east coast
- Longshoremen strike was causing worries of supply chain price increases (settled)
- Israel/ middle east conflict and rising tensions with Iran.
- Russia and Ukraine War
- China and Taiwan
- China vs US worldwide Tariffs
- Earnings
- Presidential election
Trading Thoughts? = We want to protect for uncertainties
POINT #1 – I get paid to play in the market ! = DUMB MONEY and a very little understanding of rights and responsibilities of options
Would you rather protect stock ownership with a long put or short call when both give you 3%
3% credit on a short call and 3% cost/debit on a long put
Short call credit = 3% protection on Total invested capital and a 97% Loss potential on the stock
Long Put debit = 3% loss on stock with an ATM put protecting 97% of the Total Invested Capital
Trades?
- MU still looks like the best opportunity for a bullish trade in a bullish market
- Other tech’s look nice but haven’t sold off as much as MU and not as much upside
- Look at portfolio protection with SPY puts or individual puts to protect shares.
POINT #2 – Think outside of the box
BIDU is Bearish
Next BIDU step If it breaks the 50 Day SMA we will add 91 or 90 long puts in place BECAUSE the stock will most likely fall back down to the 6 month lows of $84
Plain freaking English = We will make up every penny IF not more than the drop down from $115 to $84 = $31 of the loss on the stock or the $31 downward movement
31/115 = 27% drop on the stock that you just made up every penny
