Author: Bryan Halliday

Some major changes to the portfolio today. We are going to do a little bit of spring cleaning. When a company we own has started to be more challenged fundamentally than expected, an approach we will utilize is to sell that stock but buy something else within the sector (or even the sector ETF). That way we still have exposure to that sector of the market. But we are better positioned to have our capital perform well. We are doing that in a couple of instances today. We have sold our entire position in Intel (INTC) stock for 23.95 on the new CEO news bounce. We also bought back the covered call. Buy to close: INTC March 21st (monthly) 27.50 strike call Debit: 0.20 We have sold our entire position in Apache (APA) stock for 19.76.We hedged our covered call through buying a lower strike call for 0.01. Buy to open: APA March 21st (monthly) 25.00 strike call Debit: 0.01 This 25.00 strike call covers our short 27.50 strike call. And since they both cost 0.01, it is better to buy the 25 call then to close our 27.50 call back. Gives us a tiny chance at a profit if the stock were to sky rocket (unlikely but still a chance). We used the capital received from selling INTC to buy 300 more shares of SNAP. In addition, we sold covered calls. Bought 300 shares of SNAP at 8.65 Sold to open: SNAP April 17th (monthly) 10.00 strike call Credit: 0.23 We used the capital received from selling APA to buy 50 more shares of EQT. In addition, we sold a covered call. This covered call is partially naked as we will only own 50 shares to cover the 100 share promise. Bought 50 shares of EQT at 48.57 Sold to open: EQT March 21st (monthly) 51.00 strike call Credit: 0.50 After the adjustments today. We own 150 shares of EQT and 500 shares of SNAP.

A couple of changes to the portfolio today. We have taken profits on the remainder of our CCJ put spreads. These were protective spreads and have worked out well. The details below: Sell to close: CCJ March 21st (monthly) 45.00 strike put Buy to close: CCJ March 21st (monthly) 40.00 strike put Credit: 2.63 We paid 0.99 for 2 spreads for $198.00 of cost. We have now exited both spreads for a total credit of $502.00 coming back in. The result is a profit of +$304.00 total. That is an average of +152.00 per spread or a +153.50% Return on the spreads. We have entered into a longer-dated bearish spread in GOOG. The stock has been lagging the big tech names and we expect it to continue. Buy to open: GOOG Sep 19th (monthly) 165.00 strike put (ratio of 1) Sell to open: GOOG Sep 19th (monthly) 145.00 strike put (ratio of 2) Buy to open: GOOG Sep 19th (monthly) 125.00 strike put (ratio of 1) Debit: 3.07 Max risk = 3.07 or $307.00 per spread Max reward = 16.93 or $1,693.00 per spread

We own 2 contracts of the CCJ bear put spread. We are closing 1 contract of the spread. The profit from this 1 spread will more than pay for the other contract. So, we will make a little money or a lot of money depending on how the other spread works out at expiration. Sell to close:  CCJ March 21st (monthly) 45.00 strike put Buy to close: CCJ March 21st (monthly) 40.00 strike put Credit:  2.39 Profit of +1.40 or +$140.00 on this spread

We are closing the butterfly on SNOW for a small profit as follows: Sell to close:  SNOW April 17th (monthly) 210.00 strike call (ratio of 1) Buy to close: SNOW April 17th (monthly) 240.00 strike call (ratio of 2) Sell to close:  SNOW April 17th (monthly) 270.00 strike call (ratio of 1) Credit:  3.71 Profit of $0.31 per spread

We bought another 30 shares of X at 39.10 today which takes our position to a full 200 shares owned.

We will discuss the adjustment below live in class at 10:00 am EST today!

In this program (Trading Mentors), we only use the cash we have available. We let it build up at times and then utilize it when we see an opportunity. We had used all of our currently available funds to purchase Berkshire (BRK/B) shares last week. We will need those funds now to build our NUE position as it is moving toward the covered call strike price of 145.00 (we are 50 shares naked). In addition, we suspect that NUE will trigger an RSI above 70 today and move into “over drive” and may speed up further. So, in order to raise funds, we sold 10 of our BRK/B shares and purchased 30 shares of NUE as follows:

Sold: BRK/B 10 shares at 472.19

Bought: NUE 30 shares at 138.44

We only own 50 shares of NUE but have sold a covered call. This leaves 1/2 of our covered call “naked” so we will be prepared to hedge/protect as needed. Sell to open: NUE Feb 21st (monthly) 145.00 strike call Credit:  0.61