by Ben Weiss, for the Call to Leap Team
The S&P 500 and Nasdaq 100 indices revisited their all-time highs this week, and briefly tried but failed to push further upward. I'm continuing to take a bullish but measured approach for the near term as I explore in this week's Market News & Outlook.
Steve and I maintain a bullish outlook for the mid- and long-term. We've opened a few new options positions, but we're being careful not become overextended or overaggressive, given how top-heavy the major indices are right now. We're also investing in some long-term shares to continue building our positions in our favorite stocks and ETFs over time.
⚠️⚠️Some of the stocks/ETFs we traded this week are leveraged and riskier in nature. If leveraged ETFs and more volatile stocks aren't your style (totally ok!) and you're waiting for the market choppiness to settle down, now could also be a good time to build up your cash reserves or invest in your favorite long-term stock and index ETF holdings, which we do every week no matter how the market is behaving.⚠️⚠️
At CTL, Steve and I follow the dollar-cost average approach and try not to "time the market" and its ups and downs, however we shouldn't be surprised if we see a bit of slow down ahead. Overall, I'm with many investors in being bullish for the remainder of 2024, but we'll pay attention to the market trends and use the various tools in our options trading toolbox as needed.
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Ben’s trades this week
By LEAPS and bounds... We saw some exciting action with LEAPS calls this week. Steve and I were both able to close our AMZN 2026 LEAPS for profits ranging 10-16%! I also traded a GOOGL LEAPS call very quickly inside the week:
I bought to open the June 18, 2026 $140 call
Within 1 day, it had jumped to 6% profit so quickly decided to take my profit and exit the position.
You could absolutely stay in the position longer if you prefer, however I like to capture profits quickly and remove risk from the table. I will look to re-enter GOOGL and AMZN LEAPS coming up if they pull back a bit from their all-time high levels.
By the way, I was able to secure 2,129% annualized return on investment (AROI) on that GOOGL LEAPS. I like using AROI because it gives me a normalized measure of how positions perform. Sometimes I'm in a position for 1 day, sometimes 1 month. Time value of money really matters, and AROI allows me to quickly compare across various strategies and time frames. To calculate:
(Profit / risked collateral) * (365 days / days in position)
($350 profit / $6000 LEAPS call) * (365/days / 1 day) = 21.29 = 2,129%
⚠️⚠️Remember: Buying LEAPS is a higher risk trade. LEAPS are not guaranteed to make any profit (unlike cash-secured puts and covered calls where you automatically receive a premium) and could easily lose value. Trade at your own risk level and be sure not to overload on this type of trade. Steve and I limit ourselves to allocating no more than 10% of our portfolio size to buying LEAPS.⚠️⚠️
Closing time... I also bought-to-close (BTC) my AMZN July 5 cash secured put early for 80% profit. Because I had both LEAPS and CSP strategies applied to AMZN, I was able to close the put earlier and still maintain exposure to AMZN's continued climb with my LEAPS--essentially, scaling out of my larger AMZN position on strategy at a time.
Additionally, I was able to BTC my TNA July 12 put early for 70% profit. TNA is a leveraged ETF and moves quickly, so I typically like to take profits sooner before potential volatile downward reversals happen.
New Trade 1: KO covered call (CTL Level 1)
Expiration Date: July 12, 2024 (a "weekly" expiration)
Step 1: Have 100 shares of KO as collateral
Step 2: Sell to open 1 $64 strike call option (delta 0.43) for $0.40/share
Credit/premium received: $40/contract (minus fees and commissions)
Thoughts: I'm looking to quickly wheel these shares and not hold onto them long term, necessarily. I was assigned at $63/share and with KO's continued bullish momentum, I chose the $64 strike to capture a small slice of additional capital gains (potentially $100 extra if called away). You could also choose the $63 strike if you think KO might trade more sideways or want a higher chance of the shares being called away.
New Trade 2: SOXL cash-secured put (CTL Level 1) See caution below
Expiration Date: July 19, 2024 (a "monthly" expiration)
Step 1: Have $4,900 cash as collateral
Step 2: Sell to open 1 $49 strike put option (delta 0.24) for $1.53/share
Credit/premium received: $1.53/contract (minus fees and commissions)
Thoughts: I added 1 more contract to my existing SOXL July 19 position. The ETF declined back down some and seems to have found support along the lower green channel line. SOXL is a 3x leveraged ETF that tracks the semiconductor industry. Similarly to TQQQ and TNA, this ETF moves very fast, both up and down, but can also be a less capital intensive way to get exposure to the semiconductor sector, compared to SOXX, SMH, and other more expensive ETFs. I only trade volatile leveraged ETFs when I'm confident I'll be able to monitor my positions throughout the week. If you're a once-a-week or month "set it and forget it" style trader, this ETF may not be for you. 🚨🚨Caution: Trading options on leveraged ETFs is a more advanced and risky strategy and not for everyone, especially beginners not yet comfortable with buying-to-close (BTC) and rolling options. Please consider/tweak these positions as they fit your risk tolerance and trading style.🚨🚨
New Trade 3: NVDA LEAPS covered call (CTL Level 2)
Expiration Date: June 18, 2026
Step 1: Have $5,525 cash as collateral
Step 2: Buy to open 1 $90 strike call option (delta 0.82) for $55.25/share
Debit/premium paid: $5,525/contract (plus fees and commissions)
Thoughts: With NVDA's modest pull back recently, I decided to open a LEAPS. I'm prepared to hold this contract open longer as an "investment LEAPS" if needed since I'm bullish on NVDA, but I'll look to quickly sell this for about 10%+ profit if possible. Note: the open interest (OI) column above is not properly displaying, however there are currently 11,000+ open contracts at the $90 strike, so there's plenty of liquidity!
New Trade 4: V (VISA) LEAPS covered call (CTL Level 2)
Expiration Date: January 16, 2026
Step 1: Have $4,550 cash as collateral
Step 2: Buy to open 1 $250 strike call option (delta 0.70) for $45.50/share
Debit/premium paid: $4,550/contract (plus fees and commissions)
Thoughts: Visa has been on a nice bullish run dating back into late 2023 and prior, but saw a significant pull back this week. When I originally opened this position, Visa was finding good support at the $266 level but has since broken through downward, but then seemed to find support at the green channel line. This is a bit of a riskier trade that might take longer to turn profitable, so only trade to your risk tolerance. Visa also has earnings coming up in a little under a month so we may look to sell for profit before earnings date to reduce risk.
In it for the long-haul... As always, I held true to the dollar-cost average (DCA) method and bought a few shares each of SPY, QQQ, SCHD. The DCA method allows me to check my uncertainty at the door about whether now is a good time buy or not, especially with so much perceived uncertainty right now. Who knows if the market will go up, down, or sideways? All I know is I'll continue to be disciplined about saving and investing no matter what.
I also bought a few outright shares of post-split NVDA this week to slowly add to my long-term position.
Steve's trades this week
New Trade 1: CMG cash secured put (CTL Level 1)
Expiration Date: July 26, 2024 (a "weekly" expiration)
Step 1: Have $6,400 cash as collateral
Step 2: Sell to open 1 $64 strike put option (delta 0.48) for $2.75/share
Credit/premium received: $2.75/contract (minus fees and commissions)
Thoughts: I originally sold-to-open this position earlier in the week before CMG had a pull back. Ben also opened a similar CSP position and chose the $63 strike price. I'm bullish on CMG long term, especially since they just had a 50:1 stock split. If you're considering this trade, you might consider a lower strike price, like $62 for example, given the recent decline. As always, only trade to your risk tolerance and tweak the position as it fits you.
Steady as we go...I added shares to a bunch of my long-term positions this week, including some of my favorite stocks like AMAT, COST, MA, MSFT, NVDA, V, WM, and WMT, and my favorite ETFs, including SPY and QQQ.
As always, tweak these positions to whatever you feel comfortable with and fits your risk tolerance and investing goals.
You got this, everyone! Stay disciplined, pay yourself first, and always invest in your greatest asset—yourself. 🙌🏻
- Steve & Ben
Friendly reminders from Steve and Ben:
Check out Steve's favorite checking and savings accounts
Click here and here to see different accounts that could fit your banking needs. Offers including great sign-up bonuses and higher interest rates to let your money work harder for you.
💪💰 Do you have the power?...Based off the great recommendation from Steve and lots of folks in the CTL community, Ben recently signed up for budgeting app Empower to get a better dashboard picture of all his various accounts and has been really been enjoying how easy it is to use. If you'd like to give Empower a try, click here to check it out!
Let your money work harder for you...
I'm also getting nearly 5% APY by having my cash sit in my Fidelity account as I sell my cash-secured puts. Here's the link if you're interested in getting started!
Manage Your Cash Against Rising Costs | Compare Our Rate | Fidelity
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