Day 105

What a move up! This market is wild!

Market Recap

Both SPY and QQQ gained over 1%.

SPY is at ~$655, and QQQ is on ~$584.

VIX came down a lot, now at ~24.

Trading Update

Only one fat-fingered trade this week. But it won't hurt me too much I think since it was an accidental single share buy in TGT.

I closed quite a few trades this week, making many small profits! I am now only down ~$380 for the year. I am optimistic about being profitable in the next 4 to 6 weeks.

Here is the Year to Date list - I added previous week's list here for comparison.

This week I made money in the following tickers:

• HOOD
• INTC
• IWM
• SLV
• SOFI

Total ~340 in profits. IWM was a defined risk spread and the rest were naked trades.

Trade Ideas I am Thinking of For Next Week

MRVL (Marvell Technology Inc.) has a Trailing Twelve Months revenue and profit of $8.2 Billion and $2.7 Billion respectively. At the end of March, NVDA announced a $2 Billion investment in MRVL: https://nvidianews.nvidia.com/news/nvidia-ai-ecosystem-expands-as-marvell-joins-forces-through-nvlink-fusion.

While MRVL rose immediately following the news, I am speculating that MRVL may continue to rise a bit more, or at least not slide beyond where it currently is (~$107).

With that, I am looking to sell a bullish spread on MRVL. At this time, it looks like if I sell a $100 Put and buy a $95 Put then I would receive a $162 in premium. My max risk is $338, making nearly a dollar in theta daily, with a 73% chance of hitting 50% of premium profits at some point before expiration.

Portfolio Status

Here is the current portfolio status, including unrealized P/L.

Overall, I am down ~5K in unrealized - mainly because I have 100 shares of HOOD and 200 shares of SOFI from when I used to wheel and took assignment of those options. Now I am clear that I don't want assignments, but I will keep holding the bag on those two until they reach a point where I can start selling calls against them with a decent premium.

Note that I have so far scalped $362 and $410 in realized profits by selling some premium in SOFI and HOOD respectively (see Year to Date list image above) - so it isn't a total cash lock. Regardless - the lesson here is for traders like me who want to keep their equity and their options portfolio separate (which I do - my equity positions are in my Vanguard and Fidelity accounts, not in Robinhood and TastyTrade), that even when I sold Puts at 30/20∆, and got assigned, and then the stock crashes hard, like it did for both SOFI and HOOD, there is going to be some pain, and you don't know how long it would take to recover - assuming it ever does. Just because we have mostly seen recent crashes soon followed by recovery, there is no guarantee of that happening at all, let alone in a timeframe that would suit you.

The alternative that I think might work is one of course just keep such bets small - I am not going be totally ruined if both SOFI and HOOD were to go to zero, but two, which is that when selling premiums with a 45-DTE buy/21-DTE roll or close mindset, if market moves against you, just stick to roll or eat the loss at 21 DTE - that will keep your capital free to be deployed for next opportunity - since that is the key loss I faced. I got assigned, VIX spiked, premiums became expensive, but my buying power to sell such expensive premium eroded at the worst possible time since I got assigned and my cash got locked into the trade. Of course, none of this is fool-proof so you have to be a bit foolish like me to believe this would work and then be a bit more foolish to act on it.

The third option is to use defined risk trades but I don't want these to be more than 5% of the options portfolio since I don't like rolling these - the risk is already defined so I am already prepared to lose that entire amount - no point in rolling.

One other thing I have been doing is to consider closing one side if the price moves significantly in any one direction. But it works for me only because when I open, I typically try to sell on both sides, mostly at the same time. For example, I will sell a strangle, and if price rises - then the put I sold will lose a lot of its value, and I can buy it back at a profit. Then I will wait for theta to work its magic on the call I sold, or it may happen that price goes down and then I can buy back the call I sold too at a profit. And then exactly the same with an Iron Condor - I sell both put spread as well as a call spread, and then buy back one that loses its value, while waiting to buy back the other when either theta gains are good enough or price move is favorable making the spread cheaper. All of the trades I closed this week fell into both these categories - price moved in one direction allowing me to buy back the other direction's sell at a cheaper price and thus locking down tiny profits.

Thanks for reading. See you next week!

📌 Disclaimer: Nothing on this site is financial advice - I’m just here to entertain! Here’s my introduction, my trading philosophy, and some ground rules.