Weekly newsletter of MYstylework - Issue #70
LIFE'S PATH..
LIFE'S PATH....
Last weekend, I was hiking at the neighborhood hiking trail. As I walk towards the section into the dense jungle, I saw 2 fellow hikers passing me and slipped into a less taken trail. I decided not to take the normal route and followed them in. As I went in, I did not see them anymore at the front leaving me alone in uncharted woods. I just continued on the trail covered with leaves indicating not much hikers use this trail and I had to find which route to go as there are many slips along the way. Nevertheless, after some time, I am out and back to the main trail.
It is quite interesting, that you can go so many way in a little hill and all the ways leads you back to the same place you want to go. Some tougher trail, some less strenuous and some longer ones, you can also pass by a waterfall. You decide which route to go depending on what you want to see or how far you would like to track.
In life it is the same. There are many routes to success, as long as you decide to go and work for it, success is just within reach. Some routes may take longer if you do trial and error and some may be shorter if you get a coach or mentor to guide you. It can all lead to the same success path, you decide which to take. The important thing is of course if you walk the trail, there is no way you can't reach the destination. People have walk through the same trail, you just need to walk the same.
"The right path is not the easiest one and the easiest one may not be the right path"
SPX - 3899
A whole week of greens and it makes the market look like a salad bar. Not that I do not like it, it is just not normal to have calm markets like this. The past six months have turned many optimist into pessimist. Buy the dips have been severely painful for many as low became lower right till we hit lowest at 3636 mid last month.
The current trend for SPX is still down, and we are back above a 20% bear market. It seems, that for the second time now, we have surfaced back above 20% bear territory and may be a good indication that SPX does not like staying below. Nevertheless, we would still expect the market to trade rangebound and bounce around for a while, making it great opportunities to trade the highs and the lows whichever comes.
As last week, we were expecting a retracement by Thursday, it did not really come, so we are slightly early, hopefully a retracement will come to take us out of our short premiums. There should be some resistance ahead at 3950 and then we hit 50 MA resistance.
This week's SPX trading range would be 3800 to 4050.
NDX - 12125
A nice runup in NDX last week, closing up 540 points (4.66%). NDX breached previous high of 12175 to 12211 before closing back below previous high. It also touched 50 MA before closing down below. So we see some resistance at the current level and the futures also opened down on Monday. We will see if we can break-up above these levels this week or move back below.
This week, we have CPI announcement on Wednesday and Retail Sales on Friday. I would not be so optimistic that CPI will show great improvements considering the prices of stuff does not seem to have come down last month, in fact even higher by the month. As for retail sales, all indication of market players are on the downside with high inventory levels being reported, which is also aligned to higher prices and less monies available for spending after utilities and gas.
Last week we already said take your profits on GOOGL. If you have not, this week on the next upday when it comes. You might not get a chance as market is reaching overbought position.
Nasdaq expected trading range this week is 11600 to 12700.
EXERCISING OPTIONS
As traders' we rarely exercise our call options. Even if you are ITM, the better position would be to sell the option because there would be some form of time value left. ie. if we exercise, we forgo the time value whereas if we sell, we get proceeds also for the time value on top of the intrinsic value of the ITM option.
A situation would be different, it we are ITM and there is an upcoming dividend and that dividend value is more than the time value remaining in the ITM call. But remember to exercise before the ex-dividend rate. Besides, that you will be exposed to the price movement of the stock being a shareholder.
At times, we may also do a credit call spread and you may be assigned on one leg of the spread, ie. the short side. In such circumstances, you will short 100 shares and left with a call option. Instead of exercising the call to neutralising the position, you will just need to close both the trades as one combination, ie the -100 shares and also the call option. The max loss should still be within the spread width less credit and you will also save some exercising fees if you close without exercising you options.
Do not panic, in situations like this as you may even lose more money if you close the positions separately as market prices can change quite fast. Contact your broker if you are unsure how to close it. If you are on Tastywork platform, the support can also help you close the trade backend if you reach out to them. It may get complicated if you are not experienced with this, especially if you see a huge margin call in your account, increasing your stress even more. 😆
TRADERS TALK
Listen to Traders Talk Series 54 if you have not done so. View Past Traders Talk here.
Remember to join us every Tuesday 7.30 pm on my Facebook Page. Follow-us so you will be notified when we go live! Follow and click on the notification button, so you will never miss a show.
Visit and follow us at our Facebook Page for more contents!
Access here >>Facebook Page<<
THRIVE OPTIONS BUSINESS BUILDER
For those who had the chance to grab the Thrive Options Business Builder last month and had taken action, congratulations. We are excited to have you on board our advance training programme where eventually you will build yourself an Options Business generating high double digit returns but only with a fraction of capital used.
Over a period of 12 months, you will not only learn advanced options strategies, you will also be guided on execution of these strategies. We are still open for new registrations and it is not too late to learn some additional options strategies and implement them still for the new 2022 trading year.
The registration link is here.
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.