2021-02-20 Saturday


In this four-trading-days week, the markets have been consolidating above the new support levels. Despite the indexes being mostly in the red every single day, the overall weekly losses have been pretty modest, with prices still reasonably close to all-time highs. If this is the most bears can achieve, the general near-term expectations remain on the bullish side.


Last week mega tech stocks and small caps have been the weaker areas of the market, while Dow Industrial stocks are starting to catch up with the rest of the market after lagging for a few weeks.

Weekly performance (Week 7/2021)
– SPY (S&P500) -0.66%
 QQQ (Nasdaq100) -1.61%
 DIA (Dow Jones Industrial) -0.04%
 IWM (Small Caps) -0.91%

Volatility (VIX) has been slightly rising over the week but still at relatively low levels in the 20-22 range.



For last week’s expiration (02/19) I had 7 positions: 6 cash-secured-puts (CSP) and 1 covered call (CC).

At the beginning of week six, FVRR was approaching a test of resistance at all-time highs after a huge run on the upside, so I decided to sell my 02/19 CSP $210 well before expiration and upcoming earnings. As I was able to keep 96% of the premium in 19 days there was no point to wait additional 11 days just to get also the other 4%. I rather preferred taking off any residual risks, free up more cash, and look for new opportunities. I sold the CSP on 01/21 for an $11.80 credit and bought it back on 02/08 for a $0.50 debit, posting a 103% annualized return calculated over the strike price.


On Tuesday, I closed the $76 CSP on PINS for a $0.06 debit, keeping 94% of the premium for an 81% AROI in 6 days.


On Tuesday, I also closed the $305 CSP on SPOT for a $0.15 debit, keeping 97% of the premium for a 67% AROI in 8 days.


The other three CSPs were on AAPLNNOX, and PLTR. They all closed at expiration below the strike price, so I was assigned and had to buy the respective shares. Despite the pullback, my costs basis on all these stocks are pretty close to the actual prices, and hopefully, soon I will be able to sell covered calls on them. 


My fourth CC (covered call) on WMT expired once again worthless. The stock felt hard after reporting earnings and now it’s trading very close to my cost basis. Not much I can do at the moment rather than waiting for the stock to bounce and sell another call to keep reducing my overall cost.


The total premium collected for the week has been $2,404 (net of brokerage commissions) with an average holding period of 10 days and an annualized return of about 114% (calculated over the strike prices).

Despite these three new assignments of shares, my wheel strategy portfolio has still about 64% of cash to be used as collateral to sell more CSPs over the upcoming weeks.

In case you are interested to follow my trades in real-time, you can join for FREE my Community on Discord, where I share my personal trading journal via instant private feed.

In case you have any questions, feel free to send me an email at info@thewheelstrategy.com

Take care and trade wisely