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2 Big New Trades That I Just Opened

2 Big New Trades That I Just Opened

Posted On March 16, 2021 1:57 pm
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The world of crypto and non-fungible tokens has taken over people’s imaginations, their time, and, in many cases, a good deal of their money. We’ll try to stick with the ‘real world’  of businesses, as they pertain to generating sales and profits. 

While we haven’t made headlines lately, the Options360 Service’s bottom line is doing just fine racking up profits in 2021. In less than 3 months; now up 19.2% for the year

Not too bad, considering the S&P 500 and NASDAQ are each up only about 5% YTD. 

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We’ve accomplished this by being patient, only trading when there are attractive set-ups, and most importantly, managing risk. 

Last week, I walked through how I turned a position in Wal-Mart (WMT) from a potential disaster into ‘barely a scratch.’  To sum it up: We went from looking at a possible $1,350 loss to closing it today for just a $62 loss. Very manageable. 

This seems to mirror the overall market.  After a few weeks of volatility which involved some uncomfortable shifting, adjusting, and outright de-risking, things have settled down with the upward trend mostly re-establishing itself. 

During the tumult of rotation out of tech and into cyclicals, we took bullish positions in names such as fertilizer-maker Mosaic (MOS) and Pulte Homes (PHM), which we held for about three weeks, making adjustments along the way. We just closed them today (Tuesday) for 53% and 47% returns, respectively. I did this despite the fact that both have another three weeks until expiration. Why?  Both positions had seen their shares move up and through our strike prices, meaning further gains would come slower and with more risk. Basically, both trades, having delivered 50%-plus returns had run their course.  I took two relatively ‘easy’ 50%-plus returns in less than a month’s time.  Now, I can look for something fresher and more fertile. 

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To wit, we established a bullish position last Thursday in McDonald’s (MCD) — shares made a huge move, pushing above $220, allowing us to adjust, which reduced risk by 55% while maintaining the positional for 60% within the next week.  We made another new trade with Pinterest (PINS).  On Monday, the chart set up an attractive entry point, and I sent an Options360 Service Member Alert to set up a bullish diagonal, and the position’s already up 15% today. 

And lest you think I forgot my intention to short Beyond Meat (BYND) near the $148 level, per this March 3 article, the stock did in fact rally back to $150 yesterday.  When I saw it failing or turning negative today, I fired off a bearish Alert to Options360 Service Members.  We’re still waiting for the order to be executed, but I think my patience in waiting for an attractive entry point will be rewarded. 

Find out how this plays out & access all my new trades, by grabbing this exclusive $19 trial offer — before it expires.

About author

Steve Smith

Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.