Weekly Review OCT 13, 2024

Friday JPM beat earnings, the stock closed up almost 4.5% on the day after opening up only 2%
UBER opened up 5.5% then advanced to close up 10.7%
Do you see a theme here? …Strength… The market is strong, buyers have conviction
The Weekly Heat Map is not weak

Earnings season is here, we are also in the 4th quarter
In the last 5 years ( I just did the research so you wouldn’t have too ) the month of OCT has closed up 2.3% of 60% of the time. SEPT beat the monthly average for the past 5 years by more than we could of hoped for. And if that is any indication for what is ahead going into the EOY then we are just getting started

Sounds good doesn’t it? On paper at least. We still have to get through earnings, high tensions in the Middle East, oh and lets not forget to vote in 4 weeks. Those are all things that are out of our control. When it comes to investing we here at theoptionscoach.net are reactionary. We don’t try to outsmart the FED, or try to get ahead of a stock by buying pre earnings because an article said blah, blah or blah, only to have our stock then sink

Have you ever surfed? I have, California and Florida both. Surfing in Florida is not the same as out in Cali, not even ballpark remotely close. Just not the same. Surfers stand on the beach, they don’t lay their boards down, first off that’s “bad mojo” so we stick them in the sand upright. That keeps them “ready” to grab and go when the “break” or “set” comes…
We watch the waves come in, watch the waves go back out, and don’t go out into “the drink” until it’s “our set”

Can you feel that? We don’t chase the waves, we let them come to us. We as stock investors don’t ( OR SHOULD’NT ) chase stocks, but let them come to us…
 That’s why our box on box method is so successful. We wait on our set, but in our case, our “set-ups”
Many of those set ups are taking place right now in the way of building bases
We would much rather not buy before earnings, have a stock Gap UP 5%, then get in and ride it up 20-30% than take a gamble and have it tank.

Right now the biggest set up that there is, is NVDA
And it is stuck at the 135 price range, just stuck
One of the 839,746 benefits of trading Options over stocks is that with Options price can stay 100% flat , the same, never move, and you can still make money

One of those strategies for doing just that is called a “Strangle”
It’s an advanced strategy for active investors 
Just like Verticals they can be bought or sold
How they differ from Verticals is that they are “non-directional”
NVDA is currently stuck at 135 area
If an investor felt Neutral, and that NVDA was going to remain in that price range what they could do is then is Sell a Strangle
The investor could Sell the 135 Put and then Sell the 137 Call
As long as NVDA’s price remained in that range of 133-137 the investor would then collect all of the Premium he / she had for the trade at Expiration. American Options can be closed at any time, but selling options VS buying options differs slightly in that in most cases it is beneficial for the seller to close at the end of the options cycle where as buyers should set profit targets and exit prior to the start of Theta Erosion
The MID on the OCT 25, 2024 for Selling the 133 Put and then Selling the 137 Call is at 6.35…. So the investor could collect up up $635.00 pre Strangle contract that they sold for that time frame. Should NVDA break north or south of that price range, they would want to exit before taking a loss.
If the investor felt that the 133-137 range was too tight they could adjust it to what they wanted, that would then adjust the Premium collected as well. You could also make more money ( potentially ) but you would be adding extra risk by shortening the time to Expiration
NVDA is wound up pretty tight here, any Volume ( seeing another theme tonight? ) it could blast off up towards 140 in no time. That’s why it pays to be an active investor

Every week I demonstrate multiple ways to utilize Options for your portfolio. If you're a directional trader only, then this type of strategy might not be for you. If you believe that NVDA will be breaking north or south sometime soon then it might not be for you either. This is simply to show the strategy and how with Options we don’t have to always be directional to be profitable. I know investors that make a living using these strategies on stocks that go no where fast. These types of strategies ( this is NOT the only one ) make good money in sideways markets or with sideways stocks

CAT I mentioned that I added on Friday and I did, those were day trades, right now CAT is 402.02 We are cautious here as it approaches 405 which we believe it’s showing signs of doing so soon
If we were going to place any new trades here it most likely would be to buy the 402 Call and then Sell the 405 Call both for OCT 25, 2024…. CAT’s price could blow straight through 405 in a one single Volume push, in that case we would close the 405’s and sell the 408’s for the same date. By doing so an investor would be taking on a bit more risk with the wider spread, the “saving grace” if you will would be that CAT’s price would be strong and steady with Volume up about 405

Here’s how our stocks did this week then the heat maps

The Options Coach

NVDA +7.91%
SFM +2.85%
GE +2.19%
AMZN +1.82%
CAT +1.24%
META -1.01%
SN -2.21% 🤬