Hey Everyone!
Woohoo! It looks like there is retracement with many of our favorite stocks! I guess it does pay off to be patient, right?
Here's a snapshot of how the overall markets did this week:
Hello!
I want to say hi to everyone who recently joined our community of wealth builders! Please take your time in watching the core video series and previous Ask Steve's. I also encourage you to read some of the past Membership Positions, take all the quizzes, and talk to others on the Discord chat group. And as always, make sure to ask me and my team any questions you have. We are here to help and we're excited to start this journey to financial freedom with you. 😀
Trade of the Week:
If you sold some covered calls last month, you most likely got your shares called away. Not only were you able to collect the premium, you were also able to make some capital gains! Woohoo!
Pay attention to the delta: You can always look at the delta of the call you are selling since the delta roughly approximates the probability of the price of the stock reaching the strike by expiration. If you see that the delta is 0.10, you know that there is roughly a 10% chance that the price of the stock will reach that strike price by expiration. Likewise, if you see that the delta is 0.20, you know that there is roughly a 20% chance that the price of the stock will reach that strike price by expiration.
If you're a beginner, we recommend you starting off with selling cash-secured puts around 1-3 strikes OTM. This is typically a conservative starting point when starting the Wheel Strategy. However, since it looks like the markets are progressing forward, we recommend starting your new Wheel by selling a covered call around 1-3 strikes OTM to not only receive the premium, but also make capital gains if you are called away at expiration.
Here are some trade recommendations and see what fits your personal risk-tolerance:
MSFT: Monday Open:$242.76 Friday Close:$255.85 Change: 5.39%
Starting a New Wheel: Selling a Cash-Secured Put on MSFT - MSFT's Current Price: $253.25 - Capital needed: $25,250.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $252.50 - Premium you'll receive: $537.50 - Cost basis: $252.50 - $5.38 = $247.12
Starting a New Wheel: Selling a Covered Call on MSFT - MSFT's Current Price: $253.25 - Capital needed: $25,325.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $255.00 - Premium you'll receive: $735.00 - Cost basis: $253.25 - $7.35 = $245.90
AAPL: Monday Open:$123.87 Friday Close:$133.00 Change: 7.37%
Starting a New Wheel: Selling a Cash-Secured Put on AAPL - AAPL's Current Price: $130.36 - Capital needed: $13,000.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $130.00 - Premium you'll receive: $320.00 - Cost basis: $130.00 - $3.20 = $126.80
Starting a New Wheel: Selling a Covered Call on AAPL - AAPL's Current Price: $130.36 - Capital needed: $13,036.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $131.00 - Premium you'll receive: $555.00 - Cost basis: $130.36 - $5.55 = $124.81
AMD: Monday Open:$81.74 Friday Close:$82.76 Change: 1.25%
Starting a New Wheel: Selling a Cash-Secured Put on AMD - AMD's Current Price: $83.35 - Capital needed: $8,300.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $83.00 - Premium you'll receive: $390.00 - Cost basis: $83.00 - $3.90 = $79.10
Starting a New Wheel: Selling a Covered Call on AMD - AMD's Current Price: $83.35 - Capital needed: $8,335.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $83.50 - Premium you'll receive: $347.50 - Cost basis: $83.35 - $3.48 = $79.88
NKE: Monday Open:$133.10 Friday Close:$135.45 Change: 1.77%
Starting a New Wheel: Selling a Cash-Secured Put on NKE - NKE's Current Price: $133.68 - Capital needed: $13,300.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $133.00 - Premium you'll receive: $219.00 - Cost basis: $133.00 - $2.19 = $130.81
Starting a New Wheel: Selling a Covered Call on NKE - NKE's Current Price: $133.68 - Capital needed: $13,368.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $134.00 - Premium you'll receive: $407.50 - Cost basis: $133.68 - $4.08 = $129.61
PINS: Monday Open:$79.37 Friday Close:$85.53 Change: 7.76%
Starting a New Wheel: Selling a Cash-Secured Put on PINS - PINS's Current Price: $85.98 - Capital needed: $8,500.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $85.00 - Premium you'll receive: $567.50 - Cost basis: $85.00 - $5.68 = $79.33
Starting a New Wheel: Selling a Covered Call on PINS - PINS's Current Price: $85.98 - Capital needed: $8,598.00 - Sell at the Expiration Date: 2021-05-07 - Select the Strike: $86.00 - Premium you'll receive: $587.50 - Cost basis: $85.98 - $5.88 = $80.11
Earnings
That's right folks! We have earnings coming up towards the end of April, so make sure to be on the look out to see which companies did well, and which ones didn't. We want to make sure that the companies we invest in continue to have strong business models and have increasing revenue over time.
IV is getting a little higher as we near these earnings date. If you want to continue your Wheels, you can. However, keep in mind that there may be some wild price fluctuations in the coming days.
What's the Game Plan?
Ah yes, markets are going back up and it looks like Wall Street is having more confidence in putting their money back into their favorite stocks.
So, what's the lesson here?
Patience pays off.
This is why over the past several weeks, I've been gently asking many of you to stay patient and to keep your eyes focused on the long run. Remember, one great practice is to look at the 5-year chart of your favorite companies. Try not to get so fixated in the short-term fluctuations, especially if you are brand new to the stock market.
So what's the game plan to building your long-term wealth?
Make sure to keep funding your account every week/month. Use the deposited capital to fund your Wheels and some of your long-term holds. It is important that you remember to pay yourself first, before paying any of your bills. Having this switch in mindset and consistent practice will help fuel your account faster into becoming financially free.
Keep spinning your Wheel to generate premiums. You can use those premiums to either keep as cash or to reinvest it into your long-term holds. We typically recommend the latter.
Keep your portfolio balanced. We recommend having around 30% in the Wheel Strategy (ex. MSFT, AAPL, PINS, AMD, NKE), around 30% in long-term steady stocks/ETFs that pay a dividend (ex. SBUX, MA, V, WM, COST, SPY, DIA, VTI, VOO), around 30% in growth stocks/ETFs (ex. PINS, SQ, PYPL, ROKU, QQQ), and around 10% in cash and or in DITM LEAPS options (if you are part of the Premium Membership). When investing, make sure to invest little-by-little and not go all-in at once. I want you all to have your portfolios safe and that you don't over-invest in a short period of time.
Level 3 Launch 🎉
Woohoo! Our Level 3 video series now live and we're so excited to share it with you! This is where you're able to learn how to profit during neutral to bear markets, very similar to what we are experiencing right now with many of our favorite tech stocks.
If you're already a Premium Member, you'll have access to all of this content on top of the Level 2 video series and Premium Membership Positions. If you want to upgrade your plan, feel free to contact us at info@calltoleap.com and my team will help you with it.
Discord Launched! 💬
Investing, trading, and building wealth was a lonely journey for me. This is why my team and I created a Discord group for you and the other members to shares ideas and support one another. You don't have to go through it alone as we're all here to help. 😉
Make sure to check it out on the bottom of your "Dashboard" and follow the instructions on how to sign up. Coming from a teacher's perspective, I believe it's important to engage in conversations with people who are also seeking to reach financial freedom.
Remember that we are a community of wealth builders at all different levels, so be positive, kind, and helpful to others, so we can help each other get to financial freedom much faster.
Level 1 FAQ 🙋♂️🙋♀️
Have questions? Before asking me and my team, feel free to check out our Level 1 FAQ. This FAQ is located on the Level 1 page. You might find what you're looking for. 😊
If you do have questions, make sure to ask them in our Level 1, 2, or 3 page, rather than asking us via email.
I anticipate the major indices to move higher in the next couple of weeks. Stay patient and disciplined as I see great things coming our way! 😀
-Steve and the Call to Leap Team
The following article is strictly the opinion of the author and is to not be considered financial/investment advice. Call to Leap LLC and the author of this article does not claim to be a registered financial advisor (RIA) or financial advisor. Please visit our terms of service and privacy policy before reading this article.
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