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Monday, February 6, 2023


White Christmas Portfolio – Month 2

What a first month we had!  

Oddly enough, when I was last on BNN (I'll be on again this afternoon), we were just about to start our newest virtual portfolio after closing down this year's virtual $25,000 Portfolio early as we were way past goal, over $130,000 on the 20th (up 420%).  As that portfolio went so well, we decided to play a "White Christmas Portfolio" – as I explained on TV on Oct 24th, which aimed to practice making the same kind of small, aggressive trades, with the aim of turning $15,000 on October 24th into $25,000 by Christmas (66%).

In fact, I gave out our first trade idea, GNW, which was $6.30 during my BNN interview, now $6.47 (up 3%).  We discussed the Jan $5/7.50 bull call spread for $1.10, which is now $1.40 and that's up 27% but, more importantly, your gain playing the option INSTEAD of the stock is .30, vs .17 – that's almost 100% better gain with NO MORE RISK than buying the stock while requiring less than 20% of the cash commitment (and no margin on just the bullish spread).  

Of course, our actual WCP trade idea had another component deemed too confusing for TV – we also sold the short Dec $6 puts for .85 as an offset, which lowered the cash cost of the trade to .35 and those puts are now .20, up another .65 on their own and the net of the entire trade has gone from .35 to $1.20, which is a 242% gain on net.  Of course, none of that matters – what matters is that you put a net of $350 into the trade (10 contracts) plus about $600 in margin on the short puts on October 24th and you can cash that trade out today (we elected to cover it on Friday) for $1,200 and that is clearly 242% more cash than you started with on October 24th – the margin requirement is gone, but the cash remains!  

With that kind of success on our first trade, it's not too surprising that the whole portfolio has been doing well.  We left off last Wednesday with a balance of $35,540 – far better than we expected to do, obviously, in our first month (up 137%) so we decided it was prudent to get back to cash as we were "too bullish".  

stock photo : Risk Analysis Concept Word Cloud as BackgroundFortunately, fate intervened as that was my 2am comment and, by the time the market opened at 9:30 – fate intervened and Europe was "fixed" again and the market gapped up about 2.5% at the open and my comment to Members was:  

By the way, for WCP players – Despite the fact that I regretted not taking money and running yesterday on bull side, now that we have jumped 3%, I don’t feel the same way as we can now reverse all of today’s gains and still be fine so I’m more inclined to ride out the week than I was before all this nonsense started – it’s a buffer we did not expect and, since we’re playing with double bonus money – I think it’s worth a little risk.  

We did follow through with that plan (see comment section at the end of prior post for each portfolio move) and cashed our our ridiculously successful bull side on Friday, leaving ourselves bearish over the weekend – just in case we had a huge drop, but with plenty of cash on the sidelines – just in case we didn't!  

We closed the following positions on Friday:  

  • 12 DXD Dec $17 calls, sold for net $1.35, out at .25 – up $1,320
  • 5 TNA Dec $35/40 bull call spreads at $2.25, out at $4 – up $875
  • 10 TLT Dec 2nd $121/119 bear put spreads at .75, expired at $2 – up $1,250
  • 10 FAS 12/2 $51/52 bull call spreads at .60, expired at $1 – up $400
  • 20 DIA Dec $116 puts at $1.14 – out at $1, down $280
Going 4 for 5 in a week is always a good thing!  That adds a virtual $3,565 to our cash pile, bringing our realized gains up to $35,325.  Of course it don't mean a thing if our unrealized positions are losers but we added 2 bullish bets, on DIA and GLL to protect our very bullish FAS position that has too much premium to close as well as what we hope will be a slam dunk on our GNW position.   
Our remaining open positions are:
  • 10 GNW Jan $5 calls at net $1.34 ($1,340), now $1.70 – up $360
  • 10 GNW Dec $6 puts sold for .85 (-$850), now .20 – up $650
  • 10 GNW Jan $6 calls sold for $1.15 ($1,150), now .95 – up $200
  • 5 SCO Dec $37 puts sold for net $1.90 (-$1,900), now $1.60 – up $150
  • 5 FAS Dec $48/55 bull call spread at $3 ($1,500), now $5.80 – up $1,400 
  • 5 FAS Dec $40 puts sold for $2.40 (-$1,200), now .35 – up $1,025
  • 10 GLL Dec $16 calls at .65 ($650), now .70 – up $50
  • 10 TZA Dec $33 calls at $1 ($1,000), now $1.15 – up $150

Wow, 8 for 8 on open positions 2 weeks in a row!  That's pretty amazing as we're purposely betting in opposite directions to hedge our portfolio…  Still, it won't last as the market is making a big move this morning and that will ding the bear bets but our FAS spread is good for another $775 if it expires in the money (FAS is now $62.82 and we're very confident in the financials with all the free money being given to them) while the GNW spread (also a financial) can yield another $660 if that stock just holds $6 through January expirations.

For now, our open positions have unrealized gains of $3,950 for a net total of $39,310 – not at all bad for week 5 (up 162%).  We don't have a goal anymore, other than not blowing it between now and Christmas!  Please don't forget, if following this bonus portfolio has been good to you this holiday season – please take a moment to do something good for someone else:

Reach more New Yorkers with a matching gift!

Thanks!  We'll be looking to add bullish bets as we already have good downside protection from SCO and TZA – gold will hopefully calm down regardless of the market move up.  I'm sure by the afternoon, I'll have a new trade idea for the good folks at BNN and I have promised not to call for any more public beheadings this week (but no promises as we move into the end of the year and I make my 2012 Market Forecasts).  
Have yourself a merry little Christmas, 
– Phil


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