Hey Investors and Traders!
Woohoo! It looks like the S&P500 hit an all time high this week! For those of you who are investing in ETFs like SPY and VOO, it might be a good time to do a little dance right now. 😎
Even taking a look at this past month's performance, you can see a lot of green! 💰
Here are some notable price movements in the stocks we're trading:
Advanced Micro Devices AMD
Monday Open: $85.52
Friday Close: $87.19
Microsoft MSFT
Monday Open: $210.95
Friday Close: $215.23
Apple AAPL
Monday Open: $117.18
Friday Close: $116.59
Trade of the Week [Edited]:
If you had your covered calls and your shares got called away, you can go ahead and restart your Wheel again by selling some cash-secured puts again. Likewise, if you sold cash-secured puts last month and they expired worthless, you can also restart your Wheel.
If you're still in a covered call trade and your shares weren't called away, sell another call on your shares 1-month out at around the same strike price. We're a little more bullish right now, so you can even consider selling 1 strike above your initial strike price to bring in a little more capital gains if you're called away next month. 😉
Below are some Wheel Strategy recommendations. Feel free to choose how you want to enter your Wheel:
Starting a New Wheel: Selling a Cash-Secured Put on MSFT
- MSFT's Current Price: $215.23
- Capital needed: $21,500.00
- Sell at the Expiration Date: 2020-12-31
- Select the Strike: $215.00
- Premium you'll receive: $637.50
- Cost basis: $215.00 - $6.38 = $208.62
Starting a New Wheel: Selling a Cash-Secured Put on AMD
- AMD's Current Price: $87.19
- Capital needed: $8,700.00
- Sell at the Expiration Date: 2020-12-31
- Select the Strike: $87.00
- Premium you'll receive: $475.00
- Cost basis: $87.00 - $4.75 = $82.25
Starting a New Wheel: Selling a Cash-Secured Put on AAPL
- AAPL's Current Price: $116.59
- Capital needed: $11,600.00
- Sell at the Expiration Date: 2020-12-31
- Select the Strike: $116.00
- Premium you'll receive: $390.00
- Cost basis: $116.00 - $3.90 = $112.10
Again, if you want to be more conservative with selling your cash-secured put, you can select a strike lower than the current price. You won't receive as much premium the further OTM you go. However, if you are assigned the 100 shares, you will be able to purchase the shares at a cheaper price.
Patience Pays Off
We know it's been a bumpy past couple of months with all the crazy drama out there. Make sure you aren't getting side-tracked with all the headlines from CNBC and Yahoo! Finance articles, where they'll scare you into thinking there's a stock market crash or something. Even be cautious with the people around you who tend to be more on the negative side as they may sway you away from reaching your goals. Many of you voiced your concerns with the stock market this month since we were in a neutral trend. Know this: the stock market will always go up as long as company fundamentals are strong. Period.
Short-term volatility is absolutely normal. This is most often just caused by large institutional algorithms trading in and out of stocks in micro-seconds. Though sometimes the short-term view may look scary, make sure you always take a couple of steps back and look at the long-term perspective.
Here are some pictures that make us happy to look at whenever we have a little uncertainty creeping into our heads:
Apple AAPL
Microsoft MSFT
Advanced Micro Devices AMD
S&P500 ETF SPY
Just like with most things in life, patience pays off in the end!
Stay optimistic, everyone! We are pretty bullish for the upcoming months! ☝
- Call to Leap Team
The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article does not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.