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My Thoughts & Trades Heading into Memorial Day Weekend

My Thoughts & Trades Heading into Memorial Day Weekend

Posted On May 28, 2021 12:45 pm
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This week’s big market story has been the meme stock resurgence, with Gamestop (GME) and AMC Entertainment (AMC), nearly doubling in the last five trading days. 

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GME and AMC have undoubtedly become trading sardines, and I find it both fascinating and bizarre!  It’s not an area I get involved in, but I don’t begrudge those who do trade them. Nor do I feel they somehow degrade the market’s integrity.  There have always been pure speculation pockets and certain stocks that became trading vehicles have fully detached from any business fundamentals.  

However, this seems far less nefarious than Wall Street’s numerous overly complicated strategies and products often associated with high costs and hidden risks that get foisted on Main Street investors.  But, I’ll save that screed for another day. 

Options360 has been sticking with bullish positions in relatively “boring” blue chips such as Microsoft (MSFT) Advanced Micro Devices (AMD), and Boeing (BA).  AMD and MSFT have been mostly flat during the three weeks since we entered the positions. However, thanks to collecting weekly premiums — through the rolling process — the positions have all moved into profitability.  

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I ended up closing down the Home Depot (HD) iron condor just three days after initiating for a very modest profit because I felt the price action no longer offered an attractive risk/reward. One thing new traders have a hard time learning is that they’re allowed to change their minds. You have no moral obligation to stick with a position; closing it down and moving along doesn’t make you a bad person. Trust me, the pain of large loss will be much greater than the regret of possibly missing out on a profit. 

As traders, we usually remember, and learn more, from our losers than winners.  This is a healthy part of the learning curve.  But, it needs to be contained and ultimately outweighed by positive outcomes. 

As we head into this Memorial Day weekend, let’s take some time to think of good trades and the financial flexibility and freedom they can provide. 

Of course, let’s honor those who died fighting for what was hopefully, a positive cause or the greater good. And I suggest expanding the scope of this sentiment to remember all the good and positive of any loved ones, such as family and friends, we may have lost over the years. 

Have a great weekend! 

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About author

Steve Smith
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.

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