We are now in the midst of February. In fact with Feb being a short month, we are already more than halfway through. This month has seen a very volatile market. Earnings season continue to largely disappoint, CPI inflation numbers remain relatively high though showing some signs of tapering off, tech layoffs continue, and a big focus on AI because of ChatGPT.
Last month, I mainly sold put options to collect premiums. This month, I continued to sell some put options , but I also bought several call options when prices dropped.
Selling Put
Once again, selling put options allowed me to generate profits of over $1,100 just in the first 2 weeks of Feb. Below are the put options I sold, and the reasons for doing so.
1. $Alphabet(GOOG)$ - Strike Price of $90, $94. 1-2 week expiry.
Google stocks got hit pretty badly after ChatGPT seems to pose a threat to Google's search dominance. Also their demonstration of their own Bard AI software made a mistake. I think Google still has a sizeable moat that will not be eroded in the near future, so I would be happy to collect Google stocks at $90-94 and collected some premium in the meantime. Closed when it hit 85% profit target.
1. $Walt Disney(DIS)$ - Strike price of $100. 2 week expiry.
Another business with a large moat. Trend has been positive, with the 20EMA having crossed the 50EMA towards the 200EMA. Similarly, a business I will be happy to own. Closed when it crossed 90% profit target.
3. $Pinterest, Inc.(PINS)$ - Strike price of $23. 2 week expiry.
Has been on a gradual uptrend, making higher highs and higher lows. 20EMA has also recently crossed the 200EMA, and the 40EMA looks about to cross the 200 EMA as well. Closed after the earnings call reported a revenue below expectations and weak forecast.
4. $Meta Platforms, Inc.(META)$ - Strike price of $130.
This was a very short term call (only 3 days left) trying to ride the wave after the strong earnings report. Held to expiry and pocketed the premium.
5. $Tesla Motors(TSLA)$ - Strike price of $175 and $200. 1 week expiry.
Bullish trend with 20EMA crossing the 50EMA. Closed positions after the market seemed to turn more negative.
Buying Call
In the last week, as the markets started to turn to become less bullish, I decided to close my sell put positions, and start buying call options. These are the companies which I have bought call options, generally long term call options of at least 1-2 years. The performance at the moment is mixed, as the overall market was down last Friday. I did take the chance to buy a few call options on Friday. I am not too worried as these are all solid companies that I am very confident about. Except for BBAI, this is a purely speculative play with all the attention AI has been getting. So I bought a small amount of call options to profit from the potential upside. I am comfortable with the risk, though I may also buy a put option to create a straddle to protect against any downside as well.
$Procter & Gamble(PG)$ $Netflix(NFLX)$ $Pepsi(PEP)$ $Apple(AAPL)$ $Amazon.com(AMZN)$ $Alphabet(GOOG)$ $Microsoft(MSFT)$ $BigBear.ai Holdings(BBAI)$
So those are my trades in the first 2 weeks of February. I am making more deliberate decisions in my trades, but I still feel I get too emotional and making too many trades. I will continue to be even more deliberate in my entry and exit of the positions, and stick to the plan unless something unexpected happens.
As always, do check out my blog if you can. https://spoilt4options.com
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