t's been a mixed bag in January. Volatility has come down, which is good because virtually all my earlier trades from December have been closed. I ended 2022 with 13 open trades, 10 of them have been closed for a profit.
But also bad because it's a difficult environment to open new trades unless there are specific opportunities that arise.
We'll see examples of both these situations in action today.
This week:
$34 in Walgreens
New trade in Proctor & Gamble
$34 in WBA
Because of the low volatility since the rally in December, the one type of event that can still create opportunities to open new positions is earnings. Walgreens reported earnings earlier in the month and the market didn't like what they had to say - sending the stock down immediately. I sold 2x $32.50 puts expiring 17 Feb for $68 each. And took 50% of max profits in 1 of the puts in one day. I'm leaving the other position to run because I have an existing WBA stock position with a cost basis of $40 and wouldn't mind averaging down further.
I would say this is unexpected, but not surprising.
Once the market realises they've overreacted to earnings, the stock tends to recover quickly. We've seen this happen many times in the trades in this newsletter - PG, NKE and MSFT come to mind.
Click the button below for more trades in WBA
New trade in PG
A similar situation happened this week when PG reported earnings and was down about 2% immediately after. This happened to coincide with my live training session on Thursday, and I sold the 17 Feb $135 put for $72. Even though I didn't think this was an ideal trade, I put it on in my personal portfolio anyway because a) there are no positions in it at the moment, and b) if it does go wrong, it's a great opportunity to demonstrate how to manage rolling a trade to people in my course.
The other consideration is now that I have the Bread Crumb subscription up and running, I will be issuing more trade updates that people who have experience with options can take a look at and make their own decision.
The whole idea is I may be looking at stocks or opportunities that these people may not, so it's a good way to just have more ideas surfaced.
If you're interested in finding out more about the subscription, please check out the link below.
This article is for educational purposes only. This is my own portfolio which is being managed according to my goals and risk tolerance. Your situation is likely different and you should do your own due diligence before investing in stocks or options.