Hey Investors and Traders!
Again, markets have been caught in a range. A lot of investors are sitting at the edge of their seats, waiting to see who's going to be elected as the next President of the United States.
Here are some notable price movements in the stocks we're trading:
Advanced Micro Devices AMD
Monday Open: $83.62
Friday Close: $81.96
Microsoft MSFT
Monday Open: $220.42
Friday Close: $216.23
Apple AAPL
Monday Open: $119.96
Friday Close: $115.04
Trade of the Week:
Expiring Options
Many of you sold cash-secured puts on AMD around the $77 strike, MSFT at the $205 strike, and AAPL at the $112 strike, around a month ago, and your puts expired worthless this past Friday. You should have received between $400-600 of premium per contract! You can check out this trade from our September 27, Membership Positions here. If this happened, you can restart your Wheel again by entering with another cash-secured put. Yay!
Also, MSFT has earnings this week on October 27, AMD has earnings on October 27, and AAPL has earnings on October 28. We recommend selling 4-5 week options, so you can ride out the volatility. Try not to be a gambler by selling 1-week calls.
If you want to be more conservative, you can always wait until after earnings to see if you want to start a Wheel on AMD, MSFT and AAPL.
Starting a New Wheel: Selling a Cash-Secured Put on AMD
AMD's Current Price: $81.96
Capital needed: $8,150
Sell at the Expiration Date: November 20, 2020
Select the Strike: $81.50 (Willing to buy the 100 shares at this price)
Premium you'll receive: $544.00
Cost Basis: $81.50 - $5.44 = $76.06
Note: If you want to be more conservative, you can select a strike lower than the current price. You can consider choosing the $81, $80, or $79 strike. 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.
Starting a New Wheel: Selling a Cash-Secured Put on MSFT
MSFT's Current Price: $216.23
Capital needed: $21,500
Sell at the Expiration Date: November 20, 2020
Select the Strike: $215.00 (Willing to buy the 100 shares at this price)
Premium you'll receive: $835
Cost Basis: $215.00 - $8.35 = $206.65
Note: If you want to be more conservative, you can select a strike lower than the current price. You can consider choosing the $212.50 or $210.50 strike. 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.
Starting a New Wheel: Selling a Cash-Secured Put on AAPL
AAPL's Current Price: $115.04
Capital needed: $11,500
Expiration Date: November 20, 2020
Strike: $115.00 (Willing to buy the 100 shares at this price)
Premium: $570
Cost Basis: $115.00 - $5.70 = $109.30
Note: If you want to be more conservative, you can select a strike lower than the current price. You can consider choosing the $114 or $113 strike. 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.
Updated Earnings:
Alright gang. Hang on to your knickers as some of the stocks we're trading and investing in have earnings dates this week. Expect some volatility! 😮
Microsoft MSFT | October 27
Advanced Micro Devices AMD | October 27
MasterCard MA | October 28
Visa V | October 28
Amazon AMZN | October 29
Facebook FB | October 29
Apple AAPL | October 29
PayPal PYPL | November 2
Waste Management WM | November 2
Square SQ | November 5
PayPal PYPL News:
In case you missed it, PayPal announced that they're launching its own cryptocurrency service, allowing people to buy, hold, and sell digital currency on its site and applications.
The online payments company said that adding crypto to their services was a significant milestone on the path to mainstream adoption of cryptocurrencies such as Bitcoin. A lot of crypto fans jumped with joy, and prices rose ~5% on the news Wednesday, but dropped ~5% on Thursday. Whew, what a rollercoaster!
This goes to show you how quickly and powerful the news can affect price fluctuations in a stock. It also shows you that we shouldn't just jump in a stock only based on announcements like these. We still want to take a look at the stock's fundamentals, particularly if we see a rise in their revenue streams.
Oh and in case you're wondering, yes, we love investing in PYPL at Call to Leap due to their ability to handle and profit from digital transactions. If you want to be a conservative investor, you might want to wait until after their November 2 earnings to see if they got a good report card. You can then decide if you want to start or add onto your position. 😏
Survey:
We recently emailed out a survey to kinda check in on how you guys are doing and ask how we can better our services to you. When you get the chance, feel free to take a look. We're always looking forward to improving and bettering ourselves to serving you.
Final Thoughts:
A lot of you have sent in questions about the election and how it'll affect the stock market. Just remember that it doesn't matter too much with who is in office, as historical data has shown.
It's a little silly to only invest when a particular party is in office. Rather than timing the markets, it's better to have more time in markets. Don't let all the political news headlines and noise distract you from reaching your goal to financial freedom.
Again, hang in there with the range-bound volatility the next couple of weeks with earnings and stimulus talks still up in the air. Play it safe. Invest conservatively by scaling your positions 1-5 shares at a time. You can also feel free to sit on the sidelines until after the election and until the political dust settles. Keep in mind that you are still bringing in premium every single month, especially when your stocks don't move!
Oh and um, did you vote yet? We sure hope so! 👍
Stay healthy and positive! 😎
- 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.