Hey Investors and Traders!
Although the major indexes had a shaky first day of trading, they rebounded to new highs over the course of the week. The S&P 500 rose 1.83%, the Dow rose 1.61%, and the Nasdaq rose 2.43%. 🙌
Here's an overall view of the markets:
Here are some notable price movements in the stocks we're trading:
Advanced Micro Devices AMD
Monday Open: $92.11
Friday Close: $94.58
Microsoft MSFT
Monday Open: $222.53
Friday Close: $219.62
Apple AAPL
Monday Open: $133.52
Friday Close: $132.05
Nike NKE
Monday Open: $142.85
Friday Close: $146.35
Trade of the Week:
If you were called away from your covered calls or if your cash-secured puts expired worthless, go ahead and restart your Wheel. If you are a beginner, note that earnings reports are coming up for a lot of our favorite stocks. This means that implied volatility will be higher, which causes premiums to be higher too. If you are a beginner, you can wait until after earnings to see which companies do well to then start the Wheel. If you still want to start the Wheel anyway, we recommend you starting off with selling cash-secured puts around 1-2 strikes OTM. However, if you are more experienced and have been using the Wheel Strategy for some time, we recommend restarting by selling a covered call around 1-2 strikes OTM. From looking at the market sentiment, it looks like the markets are willing to move forward, which is why we are recommending to sell 3 week options now.
Starting a New Wheel: Selling a Cash-Secured Put on MSFT
- MSFT's Current Price: $219.62
- Capital needed: $21,750.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $217.50
- Premium you'll receive: $630.00
- Cost basis: $217.50 - $6.30 = $211.20
Starting a New Wheel: Selling a Covered Call on MSFT
- MSFT's Current Price: $219.62
- Capital needed: $21,962.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $220.00
- Premium you'll receive: $662.50
- Cost basis: $219.62 - $6.62 = $213.00
Starting a New Wheel: Selling a Cash-Secured Put on AMD
- AMD's Current Price: $94.58
- Capital needed: $9,450.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $94.50
- Premium you'll receive: $605.00
- Cost basis: $94.50 - $6.05 = $88.45
Starting a New Wheel: Selling a Covered Call on AMD
- AMD's Current Price: $94.58
- Capital needed: $9,458.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $95.00
- Premium you'll receive: $590.00
- Cost basis: $94.58 - $5.90 = $88.68
Starting a New Wheel: Selling a Cash-Secured Put on AAPL
- AAPL's Current Price: $132.05
- Capital needed: $13,200.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $132.00
- Premium you'll receive: $592.50
- Cost basis: $132.00 - $5.92 = $126.08
Starting a New Wheel: Selling a Covered Call on AAPL
- AAPL's Current Price: $132.05
- Capital needed: $13,205.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $133.00
- Premium you'll receive: $537.50
- Cost basis: $132.05 - $5.38 = $126.68
Starting a New Wheel: Selling a Cash-Secured Put on NKE
- NKE's Current Price: $146.35
- Capital needed: $14,600.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $146.00
- Premium you'll receive: $375.00
- Cost basis: $146.00 - $3.75 = $142.25
Starting a New Wheel: Selling a Covered Call on NKE
- NKE's Current Price: $146.35
- Capital needed: $14,635.00
- Sell at the Expiration Date: 2021-02-05
- Select the Strike: $147.00
- Premium you'll receive: $362.50
- Cost basis: $146.35 - $3.62 = $142.72
Earnings Dates 📅
Mark your calendars and put strap on your seatbelts! There will be some volatility in the coming weeks.
Advanced Micro Devices, Inc. | AMD - Jan. 26
Apple Inc. | AAPL - Jan. 27
PayPal Holdings, Inc. | PYPL - Jan. 27
Microsoft Corporation | MSFT - Jan. 27
Visa Inc. | V - Jan. 27
MasterCard Inc. | MA - Jan. 28
Home Depot, Inc. | HD - Feb. 23
Square, Inc. | SQ - Feb. 23
Discord Launched! 💬
Make sure to check it out on the bottom of your "Dashboard" and follow the instructions on how to sign up.
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.
What's Your 2021 Financial Goal?🎯
Here are some tips we recommend for you to consider as we stroll into this new year.
Be mindful of your spending by checking your bank statements at least once a month. Look at what you can slowly cut out, like those nightly McDonalds cravings or frivolous online shopping. However, if there is something that really brings you joy, then by all means, go for it! Just be conscious of how your cash is going in and out.
If you are financially capable, max out your Roth IRA to get tax-free benefits.
If you already are maxing out your Roth IRA, open up an individual cash account and start growing wealth there.
Set up an automatic deposit into your brokerage account. If you already are, are you able to contribute a little more each month?
Set up a routine for investing, like purchasing 1-5 shares every two weeks.
If you are making money from your dividends, premiums, and capital gains, it's totally okay to treat yourself out once in a while! Or better yet, help a friend or family member in need. Remember, the more you have, the more you can give.
Look at your phone less. Often times when we check our portfolio, we may get caught in the trap of panic selling or buying, especially when we see the color red in our brokerage apps. Be patient. Be patient. Be patient.
The more positive wealth habits you develop now, the more financially successful you'll be setting yourself up for the future. 😀
Happy trading and investing! Great things are coming your way!
- 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.