🔒Membership Positions - August 14, 2022

Hey Wealth Builders!

Woohoo! We had some great news with July's CPI data only rising 8.5% year-over-year and was flat compared with June. Economists expected increases of 8.7%. This data may indicate that inflation is finally slowing down, which means that the Federal Reserve may not have to be so aggressive with their future rate hikes. In turn, this is positive news for the stock market, which is why we're finally seeing strong upward movement in the S&P500.

And before I forget, if you would like to give me and my team any feedback on how you're doing with your journey to financial freedom with us, feel free to let us know! We welcome any testimonies!

If you would like us to post your testimonies to help encourage others, it would be wonderful if you could also send a picture of yourself too. Feel free to send your testimonies and pictures to our email: info@calltoleap.com

Thanks in advance!

What 's Steve Investing? 📈

SPY

SPY broke above the $415 level this week. I added more shares to my long-term holds and will be adding some more once I see it break and stay above the yellow resistance line.

QQQ

I am also slowly adding more shares of QQQ to my long-term holds.

AAPL

AAPL has been on an amazing rally for several weeks. I added some shares to my retirement account this week and will be adding more once I see it rise to around the $180 levels.

MSFT

MSFT also broke out this week. There may be some horizontal resistance at the $291 level. If we break and stay above this level, I will add more shares to my positions.

AMZN

AMZN also rallied with the rest of the market. I expect that the company will do well in their Q4 earnings.

And of course, I added more shares of WM to my positions this week as the stock made a new all-time-high.

With my investing strategy, I like to add more shares when I see a stock rise, which oftentimes indicates that Wall Street is putting their capital into their company. I let the stock rise and come to me and let it prove to me that they're "worthy" of investing.

Trade Of The Week:

Cash-Secured Puts

📌If you want to start new wheels, I recommend SLOWLY selling cash-secured puts on stocks that have delivered positive earnings and are showing a positive trend change in the technicals. Don't get too greedy because the markets can have a reversal at any time. Stocks that I favor right now include:

1. AAPL

2. MSFT

3. AMZN

4. GOOGL

5. AMD

However, I recommend being more conservative with choosing your underlying stock and strike prices. I personally favor AAPL and MSFT more since they pay dividends and are also part of the DOW30, compared to AMZN, GOOGL, and AMD.

You may want to sell a cash-secured put around 30-days out. I would also choose a strike around $5-10 OTM, or below the price of the current market price. Or, to be more specific, I would choose a delta that ranges from -0.30 to -0.16.

Make sure that if you are going to do this, you are comfortable with being assigned 100 shares of the stock at the strike price you choose in case the stock drops. If this happens, you can then convert the trade into a covered call to generate more premium.

If you are more bullish, you can sell covered calls or cash-secured puts a little bit closer NTM to get a little bit more premium.

Here are some recommendations you can consider:

MSFT Monday Open: $284.05 Friday Close: $291.91 5-day change: 2.76%

Starting a New Wheel: Selling a Cash-Secured Put on MSFT - MSFT's Current Price: $291.91 - Capital Needed: $29000.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $290 - Premium you'll receive: $655.00 - Cost Basis: $290.00 - $6.55 = $283.45

Starting a New Wheel: Selling a Covered Call on MSFT - MSFT's Current Price: $291.91 - Capital Needed: $29191.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $295 - Premium you'll receive: $538.00 - Cost Basis: $291.91 - $5.38 = $286.53

AAPL Monday Open: $166.37 Friday Close: $172.10 5-day change: 3.44%

Starting a New Wheel: Selling a Cash-Secured Put on AAPL - AAPL's Current Price: $172.10 - Capital Needed: $17000.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $170 - Premium you'll receive: $328.00 - Cost Basis: $170.00 - $3.28 = $166.72

Starting a New Wheel: Selling a Covered Call on AAPL - AAPL's Current Price: $172.10 - Capital Needed: $17210.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $172.5 - Premium you'll receive: $415.00 - Cost Basis: $172.10 - $4.15 = $167.95

AMD Monday Open: $100.06 Friday Close: $100.83 5-day change: 0.76%

Starting a New Wheel: Selling a Cash-Secured Put on AMD - AMD's Current Price: $100.83 - Capital Needed: $10000.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $100 - Premium you'll receive: $445.00 - Cost Basis: $100.00 - $4.45 = $95.55

Starting a New Wheel: Selling a Covered Call on AMD - AMD's Current Price: $100.83 - Capital Needed: $10083.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $101 - Premium you'll receive: $495.00 - Cost Basis: $100.83 - $4.95 = $95.88

AMZN Monday Open: $142.05 Friday Close: $143.55 5-day change: 1.05%

Starting a New Wheel: Selling a Cash-Secured Put on AMZN - AMZN's Current Price: $143.55 - Capital Needed: $14300.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $143 - Premium you'll receive: $465.00 - Cost Basis: $143.00 - $4.65 = $138.35

Starting a New Wheel: Selling a Covered Call on AMZN - AMZN's Current Price: $143.55 - Capital Needed: $14355.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $144 - Premium you'll receive: $488.00 - Cost Basis: $143.55 - $4.88 = $138.67

GOOGL Monday Open: $118.39 Friday Close: $121.68 5-day change: 2.77%

Starting a New Wheel: Selling a Cash-Secured Put on GOOGL - GOOGL's Current Price: $121.68 - Capital Needed: $12100.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $121 - Premium you'll receive: $305.00 - Cost Basis: $121.00 - $3.05 = $117.95

Starting a New Wheel: Selling a Covered Call on GOOGL - GOOGL's Current Price: $121.68 - Capital Needed: $12168.00 - Sell at the Expiration Date: 2022-09-09 - Select the Strike: $122 - Premium you'll receive: $338.00 - Cost Basis: $121.68 - $3.38 = $118.30

All-in-all, see what you're most comfortable doing and your level of risk tolerance. 👍

Ask Steve 💭

Let's see what some of our members asked this week. Here are the top questions we received:

Q1: In the lessons, Steve mentions to choose expiration timings based on if the stocks are bullish, netural, or bearish. How do we know which way the stock is moving/trending to pick the expiration dates?

A1: We like to look at the 1 month and 3 month charts. If we see it is going sideways, we know it is neutral. If it is slowly going up, we know it is bullish and if we see it is slowly going down, then we know it is bearish.

Q2: When looking at the options chain in my Charles Schwab account, I do not understand what the bid, ask, last, change, volume, etc mean...is there a tutorial I can reference? This looks different than the videos which showed a simple strike, premium, intrinsic, extrinsic, and moneyness table. Thanks!

A2: To keep things simple, we recommend just focusing on the bid, ask, and sometimes the volume. When you sell options, focus on the values under the bid column. When you buy options, such as LEAPS, focus on the values under the ask columns. Market Makers profit from the difference between these two values as their commission for facilitating the trades. The volume refers to how many trades have been placed for the security.

Q3: I noticed that Microsoft will have a dividend on 8/17. If I placed a cash secured put on Monday, should I buy it back 2 days before the dividend date?

A3: What you do with your portfolio is completely up to you. If you placed a CSP, you don't own the shares so therefore, you won't be entitled to a dividend. In order to receive a dividend, you have to have purchased the shares before the Ex-dividend date. We found a resource that can help you understand this date better: https://www.investopedia.com/terms/e/ex-dividend.asp#:~:text=The%20ex%2Ddividend%20date%20of,%2C%20or%20after%2C%20are%20not.

Q4: How many cash accounts should I have?

A4: It is completely up to you and your goals. You can have one account mainly for trading and another account mainly for long-term holds. By separating your accounts, you can invest and trade the same stocks without having to worry about the wash sale rule.

Learn From Mistakes

As we continue to move out of this bear market, it's important to reflect how our investments and trades performed and how we can do better in the future.

Was your portfolio properly allocated to fit your personal risk tolerance?
Did you get too greedy during the bull market by being overweight with particular investments or trades?
Did you set your intentions for your wheels and accept the outcomes at expiration? (ie. being assigned shares from a CSP or letting your shares go for a CC)
Did you get too seduced with the high premiums, without considering the volatility of the underlying stock?
Were you disciplined with building your cash reserves?
How was your emotional state when you saw the markets dropped?

Though none of us can predict the markets, there is one thing for certain; another pullback, correction or bear market will come in the future. The important question to ask yourself is, "Is your portfolio ready for it?"

Everyone is a "genius" during a bull market. However, my students often tell me that they learn the most when they experience a pullback or correction.

Moving forward, make sure to have the mindset of a turtle, rather than the rabbit. Investing is a marathon, not a sprint.

Be patient. Be patient. Be patient.

You got this!

📌Submit Your Questions 🙋‍♂️🙋‍♀️

Have any other questions? Before asking me and my team, feel free to check out our Level 1 FAQ. This FAQ is located on the Dashboard. You might find what you're looking for. 😊

If you do have questions, make sure to ask them on our Dashboard, rather than asking us via email. We also encourage you to watch all of the core video content and some of the past archived videos, read past Membership Positions, and take all the quizzes before sending us your questions.

📌Join Our Discord 💬

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.

Have a wonderful weekend!🙂

-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.