Friday's Large Rally Provides Large Profits And Opportunities

Markets got their act together Friday with a performance to be proud of posting approximately +1.5% gains across the 4 major indexes. Volatility got crushed and as a result, the VIX closed on major support in the high 16's.

 

The Monthly Trading Service used the rally to open a new August IWM Iron Condor for a juicy credit on Friday. We do not expect to hold this position until OpEx but instead, depending on the behavior of the market, plan to close the trade after a couple weeks, keeping the bulk of the credit received for profit.

 

The Monthly Trading Service portfolio is now 60% invested. Our 1 remaining July position, an IWM Bear Call Credit Spread, expires this coming Friday and is setup well heading into expiration. Right now the plan is to allow the spread to expire worthless for full profit on Friday 7/20. The other July positions have already been closed for profits. The Monthly Trading Service portfolio is up+3.43% for July and +16.47 since May OpEx.

 

Friday's rally also allowed us to close a Weekly Trading Service IWM debit call spread opened Thursday (24 hours earlier) for 28% profits in 1 day! We only closed half of our position leaving half open to participate in potentially more profits this coming week.

 

The "buying premium" approach is already paying off handsomely as evidenced by this 1-day weekly trade. Volatility is too cheap to sell here and option premiums are not commensurate with the Gamma risk associated with selling weekly spreads.

 

Stay tuned! Thanks to you all and have a great weekend!!!