Options Trading Newsletter - Issue #128
Independence... [Options Today...Trade Position Updates]
Independence… [Options Today…Trade Position Updates]
As we get closer to our National Day on 31 August, we reflect on the meaning of “Independence”. For a nation, “Independence” from colonialization 66 years ago. So how far are we away from the colonization of the British today and have we moved ahead into a better future?
From an economic point of view, we can compare the same nation that went independent in 1957 and part of it (Singapore) decided to break away in 1965. Singapore went independent their own way and the value of our currency went from MYR1/SGD in 1965 to MYR3.42/SGD today.
In context, both countries went “Independent” but has turned out differently value wise. Without delving into social and politics, it is not really whether you had gone “Independent” or not but more importantly how you had used that as an opportunity for betterment.
Everyone strives to become “Independent”, whether financially or even from the grasp of your parents at one time. The key point is really what do you really do with such status and how you need still to act responsibly with your new found status. Sometimes I wished I was not as independent financially from my parents as I had to solve all my own financial problems after I had started working and even to care for more people as the family grows. Hence, as long as you need to think about getting more money to spend, you are not financially independent and only when you reach a point where you need to find ways to stash the excesses, I’d say, only then you have made it. Until then, work hard and don’t forget Independence can be earned but to maintain and benefit from it, you’ll have to have a bit of vision and put up a lot of work and effort.
Happy Independence Day to all Malaysians! “Selamat Hari Merdeka”
“Freedom is not the absence of commitments, but the ability to choose — and commit ourselves to — our own best path" - Franklin D. Roosevelt
SPX (4405)
Well, we ended the 3 week downdraft with SPX going up 36 points for the week. It pushed its head above 4500 despite a heavy selloff on Thursday just before Jackson Hole. I guess no Michael Burry is going to sink it so easily as he has shorted the market so often that people tend to forget the miss sights and worship the one big short.
The message from the Fed as expected is nothing new and the market is still pricing in 4 rate cuts next year. Perhaps a strong labour data on Friday and CPI early next month will give more flavour of what’s going to happen in the September Fed meeting.
For now, we still see support at 4300/4400 levels and likely to grind higher before the next Fed meeting.
The trading range for the week is between 4300 and 4450.
NDX (14941)
Albeit a green week, the candle look bearish after Thursday’s heavy selloff where NDX lost 2% for the day. It’s always a play safe mentality now until new signs tells that the market is just going to print more money for the longs.
Even the ever great NVDA sold off from its high of $502 after it affirmed its earnings on Wednesday after market close.
It’s good to have some recoveries after the 3 week of heavy selling but we still look for the short term any rallies will be take profit opportunities for the market. So if you are long, it’s good to always have a short position at resistance levels to get some income off the smaller retracements.
The trading range for the week is between 14650 and 15150.
HANG SENG INDEX (17956)
HSI continued the selloff last week and hit a low of 17573. It recovered some grounds thereafter as the selling was just way overdone and went back to highs of 18272. That’s the time when we took the opportunity to buy the lows and sell the highs exiting with a lumpy 600 points on MHI.
On Friday, HSI basically went sideways between 18000 to 18100 through and from the whole day. Today it opened gapping up +500 points. So far, bad news that spooked it with more than 5% retracement within 1-2 days tend to recover at least 50% of it thereafter. We take such opportunities to swing trade but still keep a watch on support and resistance for trade entries.
We could see HSI trend higher back above 19000 levels, but keep a watch on if it comes back to 18000 with stops at or below 17,700.
OPTIONS TODAY [TRADE POSITION UPDATES]
Today, lets take sometime to update some of the past positions we shared in the past.
Liquid Gold Trades - XOP
XOP has gone up by 30% since May and all our trade entries were hit on the upper side. We are not all lost as we are continuing to extend duration with credit or roll up strikes without paying for it to get ourselves OTM eventually.
As price volatility is high with movements more than +/-$2 intraday is high, we are also taking in intraday trades for big swings up, both to protect the current trades or to take opportunities on reversals. Resistance is at 150 levels for now.
Crude Futures (CL) has hit resistance at 84 and is now at 80 support. If it breaks below 80, we could see it coming down to 74 level. If that happens, we could be back in game, salvaging all our ITM positions and could look back at neutral strategies trading the range of 115-140 for XOP.
Jade Lizard Trade on GLD ETF
Issue 123 Trade end July, the position is challenged on the short put side as GLD price has retraced after entry and hit lows of around 175. The price action played out as we expected in our Newsletter and TikTok Video below. Price retraced to 176 level and held support bouncing up last week. Overall the trade is slight into profit or breakeven and has 3 weeks left till expiry.
The Bear Call Spread extrinsic value is almost depleted and we placed an exit entry at $0.05 waiting for it to leg out.
As it is close to maturity, any price movement up will have a bigger impact on the short put and we could see the trade go up in profit quite fast.
For such trades, it takes a lot of patience and understanding on price actions against the P/L movements as in the past several weeks, you could see that the trade is taking losses up to $70-80 at times. Without proper understanding, one could have cut loss and exit the trade prematurely. This is a reminder that you have to have a trade objective and target even before the trade entry so that you could monitor if it runs in line with your thesis or against it to determine if any post entry trade action is required. This of course takes time to learn and all our 100+ newsletter issues are available for free to take insights from.
Earnings Play on AAPL
AAPL went south after the earnings call and our trade is in losses. It broke below 180 level but had recovered some grounds last week closing at $178.61.
As we have explained in our trade analysis and TikTok video, we entered the trade only if we are comfortable to pick-up AAPL at 180 levels through the short Naked Put and if the price gets challenged, we would need to manage the position like how we manage short puts. Get assigned or roll in time for more credits. For now, we have 3 more weeks to see if AAPL moves OTM again.
As for the bull call spread, the priced moved down so fast the value has depleted so much, it could hardly be salvaged. We now look at the short put to get OTM and still WIN on this trade for a $93 profit, despite price of AAPL did not go our way.
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TIKTOK VIDEOS
AI Validation on Options Strategy - GLD ETF using Strangle. We used ChatGPT Code Interpreter to backtest the strategy and WIN probabilities. #AI #optionstrading #chatgpt #codeinterpreter
Options Today - Bullish Trade on Apple. Increase Probability of Profits from below 40% to more than 80%. Trade as explained in our Options Trading Newsletter No.124. 31 July 23
Options Today - Trade on GLD As described in our Options Trading Newsletter Issue No.123, Jade Lizard on GLD. Entry 26.7.23. [This video is AI from my personal voice] 🤭 #optionsstrategy
Understanding IV - Part 1 - Understanding IV relation to options premium and how to read different measurement of IVs.
Understanding IV- Part 2 - How to use IV to trade GLD ETF.
DELTA is one of the most important Options Greek. Understand what it represents and how to use it to improve tour trading and how it is used for hedging and also capital and return management.
Iron Condor Trade on XOP. Get FREE petrol trading options. FREE Options Trading Newsletter https://mystylework.substack.com.
How to use Advanced Options Strategies to hedge your long term stock investment for free. Learn Options Trading for Free
Trading Options Using Jade Lizzard strategy. Get free petrol subsidies trading XOM 😏 #optionstrading #investing101 #stockmarket #xom
Banks don't want you to know this secret. Revealed in one of our earlier Traders Talk in June 2021. #banksecrets #investing101 🌈✨🏝️
Generate Property like cash flows from the stock market with only one fifth the capital. #Hello2023 #propertyinvesting #rentalincome #investing #stockmarket
Investing 101. It is difficult to catch the bottom and catch the best prices but we can tranch in our buy points so we can get the best overall long term returns without missing the boat. #hello2023 #investing #apple
Trade Digest on XBI - Trading Range using Iron Condor options strategy live from Traders Talk 27 Dec 22. #optionstrading #tastyworks
Long Trade on JD. Trade setup from Traders Talk 6 Dec 22 #optionstrading #tastyworks — www.tiktok.com TikTok video from Mystylework (@mystylework.trade): "Long Trade on JD. Trade setup from Traders Talk 6 Dec 22 #optionstrading #tastyworks". JD Long Trade | 6 Dec 22 Traders Talk | Like & Share ♥️. Lazy chill out, romance overseas celebrity, 10 minutes(1019319).
Trade Digest On XLE using Iron Condor #optionstrading #optionsstrategies — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Trade Digest On XLE using Iron Condor #optionstrading #optionsstrategies". Iron Condor on XLE | Trading in Range Use A Neutral strategy | Iron Condor | .... Lazy chill out, romance overseas celebrity, 10 minutes(1019319).
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Winning Options Strategies everyday. Creating high probability low risk trades 😎 #optionstrading #optionsstrategies #elonmusk @tastytrade — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Winning Options Strategies everyday. Creating high probability low risk trades 😎 #optionstrading #optionsstrategies #elonmusk @tastytrade". Elon Musk | Stock trading | Another WIN 😎 | .... Sunrise.
Twitter shareholder's meeting for takeover by Elon Musk 13 Sep 22, 10am. Lets trade... #optionstrading #optionsstrategies @tastytrade — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Twitter shareholder's meeting for takeover by Elon Musk 13 Sep 22, 10am. Lets trade... #optionstrading #optionsstrategies @tastytrade". select Nov 18 expiry | Sell ATM call strike 43 | recheck ATM price on open on Monday | .... TikTok's song-like tropical house(974524).
J.Powell's Message yesterday in 1 minute... @tastytrade #optionstrading #optionstrading #stockmarket — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "J.Powell's Message yesterday in 1 minute... @tastytrade #optionstrading #optionstrading #stockmarket". Fed Message??? 🏦 | Responsibility For Price Stability.... | Inflation Target | .... Suns.
What to expect for this week's market.. #optionstrading #optionsstrategies — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "What to expect for this week's market.. #optionstrading #optionsstrategies". SPX down 141 points (3.37%) last Friday after J.Powell speech | Monday another 27 points drop | but we see some slight support at 4000 level above daily 50 MA | .... Change My Mind.
Option Trade on JD - watchlist at last Traders Talk on 9 Aug. Closed today $922 profit 🤑 #optiontrading #tradingstrategy — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Option Trade on JD - watchlist at last Traders Talk on 9 Aug. Closed today $922 profit 🤑 #optiontrading #tradingstrategy". Option Trade JD covered potential trade during 9 Aug Traders Talk Entry 9 Aug Exit 26 Aug Profit $922 | watch till end to see the trade we did 😉 | Option Trades Adjustments - Based on Price Actions | .... YOU'RE MY SUNSHINE.
Hawkish remarks by J Powell crushed the market - pullback expected until Next FOMC in Sept 21. Watch for key points raised #optionstrading #optionsstrategies — www.tiktok.com TikTok video from mystylework.trade (@mystylework.trade): "Hawkish remarks by J Powell crushed the market - pullback expected until Next FOMC in Sept 21. Watch for key points raised #optionstrading #optionsstrategies". Key Points For Traders | Here's what JP said.. | > rates will go up until inflation is down to 2% | .... Flip through.
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DISCLOSURES
Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options: https://www.theocc.com/components/docs/riskstoc.pdf
MYstyework is an Online Financial Literacy Educator and materials provided is solely by MYstylework and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, transaction or investment strategy is suitable for any person. Trading securities can involve high risk and the loss of any funds invested. MYstylework, through its contents, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors, and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. MYstylework is not in the business of transacting securities trades or an investment adviser.