2021-02-14 Sunday

WEEKLY MARKET OVERVIEW

After a new breakout to all-time highs at the end of the previous week, the market has been consolidating above the new support level (former resistance) for the entire last week, still keeping an overall bullish mood, and closing on Friday once again to a new record level. Not too much to do rather than keep going with the trend but getting ready with an action plan when the next correction will come.

SPY

Weekly performance (Week 6/2021)
– SPY (S&P500) +1.27%
 QQQ (Nasdaq100) +1.54%
 DIA (Dow Jones Industrial) +1.12%
 IWM (Small Caps) +2.53%

Despite some minor spikes during the week, volatility (VIX) keeps going down and now hitting the 20 level.

VIX

WEEKLY TRADING JOURNAL

Last week’s expiration (02/12) I had just 5 positions to manage: 3 cash-secured-puts (CSP) and 2 covered calls (CC).

On Monday I decided to take some more risk off the table closing the 02/12 CSP $51 on NIO for a 0.10$ debit. That allowed me to keep 93% of the premium with an AROI of 136% in 6 days.

NIO

On Friday 02/05 I was assigned on the ADI CSP, and on the following Monday, I sold a CC as the stock was already starting to resume its uptrend. After that, the price raised well above my strike and on Friday 02/12 I was assigned and had to sell the shares. I missed part of the price growth but still was able to get an 89% AROI (Annualized Return on Investment) over the covered call plus an 87% AROI on the price appreciation. 

ADI

I sold a CC on NKE on 02/08 while the stock was posting an impressive green candle. Anyway price action has been consolidating since then, and my covered call expired worthless on Friday, leaving me with the ownership of the shares and a lower cost basis.

NKE

My other two CSP were on PTON and SPWR, and they both had a smooth development expiring worthless on Friday for full profit. In seven days, they produced an annualized return of 79% and 121% respectively.

PTON
SPWR

The total premium collected for the week has been $682 (net of brokerage fees) with an average holding period of just 6 days and a remarkable AORI of 91%. On top of it, I obtained a total of $250 from the price growth of the ADI CC shares that closed above the strike on Friday and were called away. 

This week I had no assignment of new shares, and the cash portion of my wheel strategy portfolio is now up to about 75%.

If you are interested to follow my trades in real-time you can join my FREE Discord Server where I share my personal trading journal via instant private feed.

In case you have any questions just drop me an email at info@thewheelstrategy.com

Best wishes and trade wisely

Gianmarco