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Basics of options trading
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Table of Content
Mid-Week Insights
Discord/Telegram Alerts
Earning in the market.
The play of the week was our $SPY 495 puts. We took $30 to $210.
Education
Growing your net worth with these 3 trading rules
Pay Yourself Profits Regularly:
Stop the obsession with turning $1,000 into $10,000 overnight. Instead, adopt a disciplined approach.
Set a base amount in your trading account and, each week, pay yourself a portion of your profits.
If you face losses, avoid the temptation to add more money immediately. Be patient, and continue until you're back in positive territory.
Leverage Your Corporate Job:
Maintain a steady income through a corporate job, whether full-time or part-time. Use this income to cover your living expenses and bills.
By separating your trading profits from your day-to-day expenses, you create a clear financial structure.
a. Roth IRA: Contribute to a Roth IRA for tax-free growth and withdrawals in retirement.
b. Long-Term Investing Account: Allocate funds to a long-term investment account that can include individual stocks, real estate, or other businesses. Diversify your portfolio for sustained growth.
c. High-Yield Savings: Maintain a high-yield savings account that pays out a monthly interest to hold funds temporarily before making strategic investments. This account acts as a buffer and allows you to seize opportunities when they arise.
(Roth IRA explanation is here)
(Long-term investing explanation is here)
(The High-Yield Savings explanation is here)
(Open a high-yield savings here)
Focus on Quality, Not Quantity:
Prioritize quality trades over sheer volume. Aim for consistent, modest gains rather than trying to hit grand slams. By emphasizing a steady and calculated approach, you reduce the risk of significant losses and increase the likelihood of growing your account over time.
Continuous Learning and Adaptation:
The trading landscape evolves, and it's crucial to stay informed. Invest time in educating yourself, staying updated on market trends, and refining your trading strategy. Adaptability is key to long-term success in the dynamic world of trading and investing.
If you can’t afford it, stick to free content. If you can afford it, explore paid options. Remember, paid resources should be written off as business expenses, covered with income from your own business or corporate job.
News
Interesting topics on the web
Nvidia Discloses Stakes In Arm, SoundHound AI, Nano-X, And More.
Buffett Trims Apple Stake
For Valentine's Day, I have unlocked levels for everyone.
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Roadmap & Trading Levels
Let’s give some context on why the market has bounced from the previous CPI sell-off.
We understand that the Fed has a tough decision to make, but it’s not the end of the world. The market won’t call bluff on rate cuts until the Feds say no rate cuts in March or June.
Value Trading:
Without value, the market is nothing. This is why I try only to take trades where the company’s value matches the cost of the stock. Doing so can eliminate jitters in the market for individuals holding swing trades or equity investments if more volatility occurs.
More data:
Jobless claim data is released in pre market today.
PPI data comes out on Friday.
If any data support lower inflation, even though CPI said inflation was not cooling off, I expect equities to rally.
If data supports a hotter inflation, we may retest weekly lows of 4730s.
Key levels:
E-mini
A weekly level that needs to be held is 4970-76.
If we start closing under here on a daily timeframe, we could see 4730s tested again. Overnight action is key.
Trade Idea #1:
(Scalp) If we are trading above 5010, then support could be held in the short term for a test to 5030-40. Risking 5-10 points for +20. (pre-market off of data)
Trade Idea #2:
(Scalp) Short a rejection near 5046 for a test to back to 5010.
Trade Idea #3:
(Scalp) Long if buyers step in near 4970-76 for a retest of 5005. Stops could be a break of 66. Risking 5-10 points for +30.
Join Discord for real-time alerts.
SNAP - Trade Idea #4: If we close above 10.5, this could retest $15 before choosing its next move. I am sticking with equity instead of options for this swing trade.
META - Trade Idea #5: We mentioned 460 as support in our Sunday read. This level held (show image)
It needs to break 479 resistance to gain momentum. It is currently trading at 475 in pre-market. Target 485, 500. It is hard to trade if you did not get long at at our support area.
$TSLA - Trade Idea #6: We entered last week at 184, and Tesla closed last week at 193. Now trading 190. Our target remains 215 as long as 184 hold support. Needs 195 to run to 215.
$NNOX - Trade Idea #7: $NVDA announced they have bought 59,632 shares of $nnox. Overall, this is a small amount of money. It was a $6 stock, so if you do the math, it’s only $357,792. It’s interesting to me because others may follow their lead, or $nnox may have surprising information to reveal during their earnings report on March 14th.
I alerted a buy alert in the Discord after the news was released. For these buy alerts, join here and accept a 10-day free trial.
We are long at 11.7. As long as we are trading above $6, We could test the $20-25 area. (Equity Swing)
$ENPH - Trade Idea #8: We have been bullish since 120 and are now trading at 132. I expect some resistance intraday near the 140s. For late arrivers, if 240 goes from resistance to support, we can test 165-175
$BABA - Trade Idea #9: Equity swing at above 70 is worth the risk-reward. Now trading 73. Risking down to a daily close under 66. Risking 5-10 points for +20-30.
Investment Ideas:
Idea #1: Cybersecurity ETF if you want to invest in the sector. $BUG at 31
Idea #2: Cybersecurity stock $S at $29
Newer company, Recent IPO in 2021, and CrowdStrike competitor
Idea #3: Pet Category Leader. Added to our current position. $CHWY at 16.8
Idea #4: Added to our current position. $CVS at 77
Idea #5: ETF $HACK - Cybersecurity ETF if you want to invest in the sector. Now worth $67