Money Talk Notes:

Segment 1:

Increasing volatility coming into the election is "normal" as is a correction after such a huge rally, which has been fueled by corporate buybacks and tax cuts that have distorted the true profits of US Corporations and the true demand for stocks in general.

Segment 2:  The Money Talk Portfolio 

The Money Talk Portfolio had its one-year anniversary on September 6th and we only include trades and changes that we announce live on the show and don't touch it in-between so it's the ultimate low-touch portfolio, as we come on about once each quarter. 

We started with $50,000 and now, after a year and a month, we're at $95,645 for a gain of $45,645 (91.3%) so far.  

• ALK – A short put we are confident in, should gain another $3,275 at maturity.  
• SQQQ – A good hedge that's $6,760 in the money but only showing net $3,450 out of a $10,000 potential.  Hopefully we lose the $3,450 because the market does well as it's simply insurance and not a bet.  
• ABX – A long-term bet on gold that pays up to $12,500 and is currently on track at net $2,225 so good for a new trade with another $10,275 (460%) left to gain at $15.  

• GE – Been in everyone's dog house but I like them long-term.  If they recover, could be a $15,000 net at $18 but we'll be happy with $6,000 at $15 and the current net is just $2,020 so call it $3,980 (197%) at $15 as a realistic goal.
• GIS – A newish trade still good for a new entry with a potential return of $11,250 and currently net $2,315 so $8,935 (385%) more if all goes well.  
• LB – Another sleeper but our goal is a modest $35 though we'll have to roll the 20 Jan $32.50 puts at $4.50 ($9,000) to 12 2021 $30 puts at $7.50 ($9,000).  At $35, this trade pays $30,000 and is currently trading at net $1,700 so a nice $28,300 (1,665%) at $35 would be great! 
• WPM – Possibly my favorite as they are so undervalued.  The short Jan calls will expire worthless and, this low in the channel we can sell 10 2021 $17.50 puts for $3 ($3,000) and roll the 30 2020 $22.50 calls at $1.03 ($3,075) to 25 of the 2021 $15 calls at $4.40 ($11,000) and sell 25 of the 2021 $22.50 calls at $1.80 ($4,500) and buy back the 30 short 2020 $30 calls for 0.36 ($1,080).  So, to recap, we're essentially closing this whole trade and opening a new 2021 $15/22.50 bull call spread at net $2.60 ($6,500) and selling 10 of the 2021 $17.50 puts for $3 ($3,000) so our net/net on the new trade is $3,500 with a potential gain of $15,250 (435%) at $22.50.

We have a small hedge and I like our 5 spreads and the short put which, if all works out, will make another $70,015 between now and 2021 so all we really have to do, between now and then, is check on them each quarter to make sure they are on track and this portfolio will gain another 140%.

Since we do have $85,740 cash on the side and we're only using $30,000 in margin, we can add one trade and one hedge:

• Sell 10 MJ 2021 $30 puts for $7 ($7,000) 
• Buy 20 MJ 2021 $25 calls for $9.50 ($19,000) 
• Sell 20 MJ 2021 $45 calls for $5.25 ($10,500) 

That's net $1,500 on the $40,000 spread that's currently $16,000 in the money with a $38,500 (2,566%) upside potential.  It's crazy volatile but a lot easier than trying to pick an individual winner in the Cannabis Industry!  

As a hedge, I'd like to add TZA with a short put that pays for it:

• Sell 5 CAT 2021 $100 puts for $10 ($5,000) 
• Buy 40 TZA April $10 calls for $2.25 ($9,000) 
• Sell 40 TZA April $15 calls for $1 ($4,000) 

The net cost of this spread is zero but we are obligated to buy CAT for $100 if it goes that low (20% lower) and that's not likely to be the case if our TZA bet fails to win.  The spread pays up to $20,000 and is currently $5,400 in the money so you can't lose unless the Russell is higher in April and that should be good for the short puts.  

Also, just because they are such a good deal, I'd like to sell 5 MU 2021 $35 puts for $6.40 ($3,200) as we'd only be promising to buy 500 shares at net $28.60, which is a 28% discount. 

UPDATE**UPDATE**UPDATE**UPDATE**UPDATE**UPDATE**UPDATE**UPDATE**UPDATE

Turns out TD does not like Pot Stocks so we can't do MJ for that portfolio (though I still like the trade!).  Instead we'll turn MU into a proper trade with:

• Sell 5 MU 2021 $35 puts for $6.40 ($3,200)
• Buy 10 MU 2021 $35 calls for $12.40 ($12,400)
• Sell 10 MU 2021 $50 calls for $7 ($7,000)

That's net $2,200 on the $15,000 spread so the upside potential is $12,800 (582%) in two years if MU can get back to $50.