Day 109

What an awesome week! My profits went up as the market continued to rally and VIX started to come down.

Market Recap

SPY moved up by nearly a percent and QQQ zoomed up again, moving up by 1 and a half percent.

SPY is at ~$720, and QQQ is on ~$686.

VIX is now down to ~17.

Trading Update

I closed positions in the following usual suspects:

• PLTR
• HOOD
• SOFI
• SLV
• SPX

As well as the following unusual ones.

• TMC
• TEM

Let's look at the unusual ones first.

TMC and TEM were trades I copied from a TastyLive YouTube video (this one). I did not have any particular profit target for them, I thought these will just be some fun trades to try. These were really cheap stocks, one a $5 one and another ~$50, and my max possible loss on these was fairly low. Anyway, I didn't hang around long enough in the trade to find out - they both had earnings coming up soon and were seeing a little bit of volatility, I closed them the moment I caught them in a profit zone, making $17 and $29 respectively on those. Net Profit: $46.

With that out of the way, let's look at my usual suspects.

PLTR

• Sold a Naked Put at the expected move price ($125) for May 8th on April 24th, receiving $249 in premium.
• Bought back yesterday (May 1st) for $111
• Net Profit: $183

HOOD

• Sold a Call at the expected move price ($90) for May 22nd on April 14th, receiving $239 in premium. Note: I own HOOD, so this was a Covered Call.
• HOOD breached $90 still almost a month away from my expiry date. There was enough premium remaining and the option still had enough value so my shares didn't actually get called away. This is typically because any trader on the other side of the trade will need to pay for the remaining premium too to forcefully call away the shares so early, even if the option is in the money. I would recommend reading about moneyness here if you want to see more: https://www.tastylive.com/concepts-strategies/moneyness
• HOOD later crashed, so I thought I will re-enter the Covered Call when it rises back up. I bought back the call option to close the position for $61 on 4/29. I will continue to hold the bag on these HOOD shares.
• Net Profit: $178

SOFI

Last week, I wrote:

I do have SOFI and HOOD that were assigned earlier in the year that I am selling Covered Calls on as and when possible - and they have not yet been called away. Fingers crossed they don't cost me over $600 bucks!

• I sold a $19 Call (Covered) on SOFI and it got tested for a while.
• Instead of waiting around to see what happens, I bought it back and closed the call I sold, at a small loss.
• The reasoning was that I already own the shares which has a cost basis of $26, so being called away at $19 is a bigger loss than the price I bought the option back for. I will continue to hold the bag on SOFI shares as well.
• Net Loss: $85.

SLV

• Sold a Naked Put at the expected move for June 5 ($60) on April 28, receiving $146 in premium.
• Bought back the Put for $93 yesterday (May 1st).
• Net Profit: $53

SPX

This one - I risked.

Serially.

And won.

Over Multiple Days.

Every. Single. Time!

• First one was a 7-DTE $20-wide Put Credit Spread at the expected move price.
  • Opened Friday, 4/24.
  • Received $360 in premium
  • Closed Monday, 4/27, buying back at $180.
  • Net Profit: $180
• Next up was a Zero-DTE $10-wide Put Credit Spread, also at the expected move price.
  • Opened 4/28 at 6:32 AM
  • Received $245 in premium
  • Closed at 7:35 AM, bought back at $130
  • Net Profit: $115
• Next one was a Zero-DTE $10-wide Iron Condor, at the expected move.
  • Opened 4/29 at 6:40 AM
  • Received $305 in Premium
  • I let this one expire! Did not close it. And thus kept all of the $305 premium.
  • I was feeling particularly bullish. My risk really was just $695, which is Spread Width - Premium, i.e, $1000 - $305. Since I couldn't lose both the Put Spread as well as the Call Spread if I took no action at all to manage the trade. This trade was thrilling, all the way to market close as I watched the clock tick by.
  • Net Profit: $305
• Next was a 5-DTE $10-wide Iron Condor, at the expected move.
  • Opened 4/30, received $420 in premium.
  • This one was a skewed Iron Condor though. $10-wide Put Credit Spread, paired with a $5-wide Call Credit Spread. While opening, I was afraid that the market was too bullish and so I want to risk a lower amount on call in case it got touched. And it did, on 5/1, when market opened, I noticed the call spread was already breached. So I decided to get out while I was still ahead.
  • Closed 5/1, buying back at $350.
  • Net Profit: $70
• The last one was a Zero-DTE $10-wide Iron Condor, also sold at the expected move.
  • Opened 5/1 at 6:42 AM, receiving $200 in premium.
  • Since I had already seen my 5-DTE call being breached, I once again skewed the condor, risking $10-wide spread on Put spread and $5-wide on the Call spread
  • I had made up my mind to let this trade run all the way to expiry when I opened it. And that's what I did. And I got to keep all of the $200!
  • Net Profit: $200
• All told - I had 5/5 winners this week in SPX, and my net win on SPX for the week was $870 ($180 + $115 + $305 + $70 + $200). This week brought my net P/L for SPX back to green! And my max risk across all of these SPX spread/condor trades was just $1640! That is a risk-to-reward ratio of roughly 2:1, ~53% return on capital risked in just a single week! SPX is magic! For now :).

Here is the entire Year to Date P/L list for closed positions - I added previous week's list here for comparison.

I closed $1200 in premiums this week, nearly tripling my gains for the year to date from $605 to $1805.

Trade Ideas

INTL (INTEL) has set a scorching pace for its revival. It has 5x-ed from 20 to 100 in just about a year, having hit its lows in high teens, in 2024.

Looking at the options table 48 days out, traders are seeing a risk to the upside.

As you can see below on the June 18 table, an equidistant strike away from current price (of ~$100), $20 up at $120 has a premium of ~$510-$525, whereas if you go $20 down and looked at premiums at $80, that is only between $310-$320. Assuming mid-point prices, that's a gap of nearly $200. I am with the market on this one, am bullish on Intel continuing to rise, so I could sell either a Naked Put (my preferred approach) or a Put Credit Spread on INTL. And exit at or before 21-DTE with either a 50% return on original premium or some loss, since I have no desire to own the shares of the stock.

Portfolio Status

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

This week, I was dancing around with my expiry on SPX, placing trades in a manner such that I could avoid getting a Day Trade flag. Traders still need to wait for the June 4th date when Pattern Day Trade (PDT) rule changes get changed, and the $25K minimum rule gets lifted. While I have breached the $25K limit in this account, I still don't want to go through any theoretical or real hassle of PDT rules being applied to me in the last few weeks of its existence. Read here about these rules, their updates, and history: https://tastytrade.com/learn/markets/industry/pattern-day-trading/

As you would have seen above in my trade logs - trading in SPX when market goes up - seems like a really profitable idea. This week I was really fortunate to make some money on my ideas. The thrill of idea validation by market within hours or a day or two is something I had not experienced when I had been waiting around for weeks (or years for buy-and-hold index/share positions in for example, my Vanguard account). SPX is going to be what I will predominantly trade going forward for my options, at least until some sequence of losses shake my confidence in it. And I am eagerly waiting for PDT rules to change in about a month - that way I can further increase my odds of success by trading more frequently. I strongly believe in the law of large numbers - the more I trade the statistically probable trades, the more the probabilities actually come close to their value, giving me success.

The catch seems to be that I likely won't be able to continue writing this newsletter. With an uptick in the volume of trades I place, I am losing the desire to carefully document all of the trades - I think the last 16 months of documentation has taught me enough to survive. Let's see what the future holds.

All else being equal in the world - trading options still seems like the fairest challenge. If you have a hunch - you can get it right or wrong all on your own. No bosses to blame, not the economy to worry about - just you and your thesis - and the trader on the other side of the trade.

That's enough philosophy for this week!

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.