Hello Investors,
Today we discussed the markets lackluster break higher on Covid-19 vaccine news. A big rotation happening out of growth (Tech) and into value (Financials and Energy). We expect this to have legs for a while. We are likely to hold off on investing much capital into new names for the next few weeks. We think that as investors there will likely be better opportunities with some degree of patience. We also discussed the psychology of markets. Basically, that no matter what you do you will always feel unsatisfied. When markets go up, you will feel that you don’t own enough. When markets go down, you will always feel that you own too much. So, find the right levels so that markets don’t suck you into really bad decisions in the boom and bust cycles.
With that, we are likely to increase our trading a little as investing takes a back seat. This is probably a trading market and not an investors market and we will be looking to trade it as such!
We entered into a call butterfly on GDX.
Buy to open: GDX Jan 15th (monthly) 40.00 strike calls (ratio of 1)
Sell to open: GDX Jan 15th (monthly) 45.00 strike calls (ratio of 2)
Buy to open: GDX Jan 15th (monthly) 50.00 strike calls (ratio of 1)
Limit debit: 0.81 (can pay less than 0.81 as of this update)
We rolled up the short calls in BAC
Buy to close: BAC Dec 18th (monthly) 29.00 strike calls
Sell to open: BAC Dec 18th (monthly) 31.00 strike calls
Limit debit: 0.36
Have a great week!