Watch my new YouTube video: QuickPick: EVGO for fast charging
I’m starting up my videos on JubakAM.com again–this time using YouTube as a platform. The thirty-third YouTube video “QuickPick: EVGO for fast charging” went up today.
Volatility
Buying AMD shares and options tomorrow as my play on a second quarter earnings season surprise
Yesterday in my video “3 Picks for an Earnings Blowout” I argued the case that even the 61% second quarter year to year jump in earnings in the Wall Street analyst consensus was understated.. There’s a very high likelihood that we’ll see lots of positive earnings surprise in the second quarter earnings season the begins on July 13 when JPMorgan Chase reports earnings before the market opens. In that video I suggested three stocks JPMorgan Chase (JPM), Taiwan Semiconductor (TSM) and Advanced Micro Devices (AMD) as picks to play that second quarter earnings surprise. Today I’m adding one of these Advanced Micro Devices to my online portfolio with shares in my 12-18 month Jubak Picks Portfolio and Call Options in my Volatility Portfolio.
Selling my VIX July and August options to complete my roll over into the November Call
Last Friday I recommended a buy of the November 17, 2021 Call Options on the CBOE S&P 500 Volatility Index (VIX) with a strike at 18 for a new hedge in increased stock market volatility in the fall. The 3.32% drop that day to 15.44 took the index, which measures how much investors and traders are willing to pay to hedge against volatility in the S&P 500, took out the low for the VIX for 2021 and you have to go all the way back to February 10, 2020–before the pandemic knocked the stuffing out of stocks–to find a lower level for the “fear index” at 13.68. My thought on this buy was that at this price I was getting a chance to hedge volatility at a level that would generate a profit even if we didn’t get a big volatility event. Since that buy that Call Option (VIX211117C00018000) has climbed to $5.75 from my buy at $5.20 with a gain of 2.68% today. The VIX itself has edged high both today and yesterday to a close on June 29 at 16.11, up 2.22% on the day.
Rolling over my Call Options on the VIX as volatility fears continue to fall
Investors and traders are less afraid of a drop in stocks than at any time in 2021. The CBOE S&P 500 Volatility Index (VIX), which measures how much investors and traders are willing to pay to hedge against volatility in the S&P 500, is down another 3.32% to 15.44 today, June 25, as of 3:30 p.m. New York time. The drop took out the former low for the VIX for 2021 at 15.65. I have to go all the way back to February 10, 2020–before the pandemic knocked the stuffing out of stocks–to find a lower level for the “fear index” at 13.68. So today I’m buying Call Options on the VIX–which will go up if fear and the index climb for November 2021 with a strike at 19.
Special Report: 5 Picks and 5 Hedges for a Falling Market–another (new as of August 17) installment on hedging
After Wednesday’s news from the Federal Reserve, we all know that an interest rate increase is coming–even if we don’t know when. Could be 2022. Could be 2023. And even if we don’t know how many increases we’re looking for in that time period. Could be one. Could be two. The need to revise your portfolio to take that change in monetary policy is obvious. But figuring out how and when isn’t by any means straightforward. What gives? And how should be navigate a period that is almost certainly going to end with a reversal of the lower for longer interest rates that have dominated asset prices for decades? Today, for the last installment in my Special Report: “5 Picks and 5 Hedges for a Falling Market” I’m going to take one last run at how to hedge this market and how to position your portfolio for the developing trends. (I don’t have much hope that this will be the last time I’m visiting this topic, of course.)
On the market’s risk complacency, I’m adding another VIX call to my Volatility Portfolio–this one for October
The CBOE S&P Volatility Index (VIX) dropped 8.9% on Friday, June 4, to 16.44. It’ up just slightly today to 16.73 (up 1.89%) as of 2 p.m. New York time. That’s, in my opinion, an extremely low reading on the fear index considering how many potentially market moving volatility events we’ve got ahead of us over the next six months. (For a list see my Special Report: 5 picks and 5 hedges for a falling market.) So today, June 7, I’m adding another Call Option on the ViX to my Volatility Portfolio.
Selling Build-A-Bear Workshop out of my Volatility Portfolio
When I added shares of Build-A-Bear Workshop (BBW) to my Volatility Portfolio on March 31, 2021, I was thinking that the stock would move up in price as pandemic restrictions that had forced the closing of most of the company’s stores eased. The company had made a huge and successful shift to online selling and I thought that Build-A-Bear would be able to continue that success as well as reap the revenue gains that would come from the reopening of its brick and mortar stores. But I certainly didn’t expect the stock to gain 103.91% from then until the close on May 26. The stock climbed another 39.31% today on the release of earnings and is now up 100.14% in the last three month; 78.10% in the last month, and 56.33% in the last week. I’m selling the shares today, May 27, on the great news in the earnings report for the quarter.
Selling my Disney Call Options today ahead of Friday’s inflation volatility
The Disney July 16 Call Options (strike price $170) are up another 17.98% today, May 25, as of 1:30 p.m. New York time to $9.91. I’m going to make my profit in this option position today ahead of the potential volatility later this week ahead of Friday’s big inflation data release. I bought these options back on May 17 at $7.17 a contract. I’m closing the position with a 32.6% gain.
Gold draws near even for the year, approaches resistance
Gold closed up today, May 24, by 0.27% to $1884.00 an ounce for August delivery on the COMEX. That took the metal to its highest price since its January 5 high for 2021 at $1954. The rally in gold from a March 8 low at $1678 an ounce, has not only brought gold near breakeven for 2021, but is pressing against resistance near $1900 an ounce. Gold has posted three straight weekly gains. No secret what’s been driving gold higher: fears of rising inflation.
Special Report: How to find “real” green stocks–with 10 picks to save the planet: Part 3: My first five (low-hanging fruit) stock picks
Here are my first five stock picks for my Special Report on finding “Real Green” Stocks. These are my “low-hanging fruit” stocks for climate change.
I’m going with the Disney July 16, 2021 Calls at $170
Last night I said that I’d buy the Disney Call Options for July 16 at either the $170 or $175 strike price. On Friday, I noted that the spread between the two options seemed especially large at 38.4% and that I’d wait for Monday trading to give me more of a clue on which option to prefer. Today I’m going with the $170 July 16 Call Options (DIS210716C00170000) because with today’s drop to $170.01 they remain slightly in the money and I think they’re more likely to give me a significant gain during the life of the option.
Why I didn’t sell any of my downside hedges this week–and some thoughts on how to decide when to sell
On May 11, when the Standard & Poor’s 500 was headed for a 2.14% loss on the day, I took a long hard look at selling the downside hedges I own in my Volatility Portfolio. In that portfolio I own a September 17 Put Option on the iShares Russell 2000 ETF (IWM) and two Call Options on the CBOE S&P 500 Volatility Index (VIX) for July 21 and August 18. I came very close to pulling the Sell trigger on one of the VIX calls. (Because the VIX goes up as fear in the market rises (usually on a sell off or worries about an impending sell off, the Call Option on the VIX acts as a Put Option. It will become more valuable as the market falls.) I was in the black on the August 18 Call Option with a strike price of 22 because the Vix had climbed 26.33% on the day to a close of 27.59. I think the decision not to sell was a non-decision. And a mistake. I dithered over it for so long that the market had closed by the time I decided to sell. A sell would have resulted in a profit of 9.2% from my March 23 buy. Not huge but still money. I decided not to sell the iShares Russell September 17 put with a strike price of $215. The ETF would close that day at $218.96 and then drop to a close of $211.75 on May 12. A Sell would have resulted in a gain of 15.6% atom my March 24 buy. Unlike the failure to sell the VIX Call, I don’t think the decision not to sell the IWM Put was a mistake even if it meant foregoing a 15% profit (on a holding period of less than 2 months.) Let me explain.
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