Stock Trading

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Del
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Post by Del »

sweetandsour wrote: 18 Jun 2024, 07:57 When to sell NVDA, that's the current question. Well, that, and what's with the Christmas lights and snow flakes.
I'm waiting to sell NVDA until after the AI boom matures. Three to five years, maybe.

As for the snow... That's just Biff, celebrating the Canadian Summer Solstice.
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Post by Del »

SPX is trading in new record-high territory, just as we are entering earnings season. Mr. Market is expecting lots of good news.

As last weekend was the end of the Second Quarter, I did some analysis and rebalancing.

TRADING ACCOUNT: (Current balance = $65K)

Strategy: Buy and hold stocks. Sell covered calls. Use margin option buying power to sell iron condors (credit spreads).
The condors are doing the heavy lifting for cash returns.

Major holdings: CAVA, NVDA, XLE. JEPI for cash reserves.

I recently sold ARKK (innovation fund) which has not performed well. Bought 100 NVDA, which is affordable after the stock split and I can sell calls.

INCOME ANALYSIS:
My trading account performance is a whopping 60% YTD! (Since 1/1/24).
I won most of that during Q1. Q2 has been a bit of struggle.

Looking back to 1/1/23 (when I started trading in earnest), my overall return has been 56%.
This figures out to 37% annualized return over 18 months. About 3% per month.
A successful active trader (of any style) makes 3% to 5% per month, so overall I'm meeting expectations.
I've made some mistakes and learned from them, so I hope to improve in the future.

BALANCE ANALYSIS:
I've been drawing heavily from my trading fund to supplement our family budget due to bidenflation. Doing the math, I'm drawing 2.25% per month.
That's way too much draw for a fund with average return of 3% per month. No wonder it's not compounding.
I started drawing in Q1 when the market was really booming, so the draw didn't seem so heavy at the time. Looking back, this was a mistake.

We just started to draw from Mrs. Del's IRA savings instead of my trading fund. She is invested very conservatively, but the fund is large enough that this draw is not a concern.
The trading principle is to draw from funds with the lowest return -- and allow the high-return funds to compound aggressively.

Without draws, I expect my balance will double every 18 months, more or less.

With grateful thanks to Tim for encouraging me to explore NVDA and hold individual stocks, esp. NVDA
And to Andy Tanner of Cashflow Academy for the options strategies courses. (Affiliated with Robert Kiyosaki, author of "Rich Dad/Poor Dad")


RETIREMENT IRA:

Strategy: Hold individual stocks. Sell covered calls.

Another whopping return: 33% YTD
SPX is up 15% over the same period, so I am more than double the market return.

CAVA and NVDA are doing most of the work.
I recently sold ARKK and bought AMZN.

My retail sector (Target TGT and Ultra Beauty ULTA) and XLE have underperformed under Biden, but I expect them to recover well under Trump. I'm holding on.

With gratitude to Mr. Piper for encouraging me to adopt this strategy. And for alerting my attention to CAVA.

Personal milestone: In six months, my retirement fund has grown by more than Mrs. Del will earn by working hard, all year.

This has been a stellar market year (although clouded by the reality that much of this growth is just bidenflation, not actual buying power). I need to give some serious thought toward allowing Mrs. Del to retire early.
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Post by sweetandsour »

Del wrote: 18 Jun 2024, 14:36


I'm waiting to sell NVDA until after the AI boom matures. Three to five years, maybe.

Not me; I sold this morning when it peaked above 130. Our IRA does the holding, but this trading account does the trading, and the longer I held it the more nervous I got. I regret buying more, though, when it dropped back to 119 or 120 last week. My trading account missed out on some direct NVDA upside, but our IRA made up for it.

Otherwise there were one or two learning opportunities that cost my trading account, but I'm still up 15.96% for the year. Not taking advantage of a trailing stop cost me ~$600, but I'll try not to make that mistake again. We'll see if upcoming earnings reports presents some opportunities.
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Post by Del »

sweetandsour wrote: 08 Jul 2024, 11:44
Del wrote: 18 Jun 2024, 14:36 I'm waiting to sell NVDA until after the AI boom matures. Three to five years, maybe.
Not me; I sold this morning when it peaked above 130. Our IRA does the holding, but this trading account does the trading, and the longer I held it the more nervous I got. I regret not buying more, though, when it dropped back to 119 or 120 last week. My trading account missed out on some direct NVDA upside, but our IRA made up for it.

Otherwise there were one or two learning opportunities that cost my trading account, but I'm still up 15.96% for the year. Not taking advantage of a trailing stop cost me ~$600, but I'll try not to make that mistake again. We'll see if upcoming earnings reports presents some opportunities.
Well done on catching NVDA at the top today.

Up 16% is pretty good, and you learned a lot on the way. Just be mindful that SPX is up 16.9%, so you are tracking the market -- not beating it.
=======================
I bought 100 NVDA on 7/1 at 121.25. I sold 1 covered call (exp 7/12) at strike 130 for $111. (delta = .2)
On 7/3, NVDA spiked to 128.25. I sold 10 naked calls (exp 7/12) at strike 140 for $413. (delta = .1)

I only sell naked calls when the price runs up and stops at resistance. And when the market isn't expecting any big news soon. That's a rare enough situation, and I have to see it in real time as well. This is only the second time I have sold naked calls. Last time was also NVDA, back in March. I made $619 on the trade.
I set the strike way up high and keep the term short, so I don't end up holding a lot of short stock.

It got above 130 briefly today (7/8). If it closes above 130 on Friday, I will make $1400 over two weeks. I will buy it back and do it again.

If it closes around, say, 128.5, I will make $1,240 over two weeks. Plus I get to sell covered calls again.

We'll see what Friday brings. June CPI drops on Thursday morning, and weekly Unemployment claims. Mr. Market wants to see lower inflation and higher unemployment.
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Post by Del »

CPI just dropped. Year-over-year inflation is 3.0%, less than the expected 3.1%.

This follows Chairman Powell's testimony to Congress this week, in which he is softening toward lowering rates a bit and watching inflation/employment data closely.

Mr. Market is going to be exuberant today.

What a way to kick off earnings season!
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Post by Del »

Mr. Market is full of surprises.

SPX (multi-nationals) has decided firmly against exuberance.

Russell 2000 (mostly All-American companies) is giddy and soaring.

NVDA pulled back hard, bring SPX down with it.

My retail stocks (Target and Ulta Beauty) surged. Energy sector is also having a big day. Mr. Market thinks that the economic news will be good for consumers (that's us, people).
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Post by sweetandsour »

Del wrote: 11 Jul 2024, 11:59 Mr. Market is full of surprises.

SPX (multi-nationals) has decided firmly against exuberance.

Russell 2000 (mostly All-American companies) is giddy and soaring.

NVDA pulled back hard, bring SPX down with it.

My retail stocks (Target and Ulta Beauty) surged. Energy sector is also having a big day. Mr. Market thinks that the economic news will be good for consumers (that's us, people).
The Fidelity morning briefing this morning showed a chart from JP Morgan with their expectations, based on whatever the CPI ended up being. The negative CPI was predicted to result in a big increase for CPX today. And it did increase briefly, before sliding on back down. Same for the tech stocks. I was watching the earnings reports this morning for Boeing and others that reported pre-market, and moves seemed subdued, even for those beating the forecasts.
I've been watching Corning and FTAI lately. I've ignored Target; but just now looked at Ulta Beauty, and it's kind-of expensive for my account. More earnings reports tomorrow morning that I plan to be watching.
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Post by Del »

sweetandsour wrote: 11 Jul 2024, 16:20
Del wrote: 11 Jul 2024, 11:59 Mr. Market is full of surprises.

SPX (multi-nationals) has decided firmly against exuberance.

Russell 2000 (mostly All-American companies) is giddy and soaring.

NVDA pulled back hard, bring SPX down with it.

My retail stocks (Target and Ulta Beauty) surged. Energy sector is also having a big day. Mr. Market thinks that the economic news will be good for consumers (that's us, people).
The Fidelity morning briefing this morning showed a chart from JP Morgan with their expectations, based on whatever the CPI ended up being. The negative CPI was predicted to result in a big increase for CPX today. And it did increase briefly, before sliding on back down. Same for the tech stocks. I was watching the earnings reports this morning for Boeing and others that reported pre-market, and moves seemed subdued, even for those beating the forecasts.
I've been watching Corning and FTAI lately. I've ignored Target; but just now looked at Ulta Beauty, and it's kind-of expensive for my account. More earnings reports tomorrow morning that I plan to be watching.
Ulta Beauty stock has suffered under Biden. They sell premium make-up and salon services. The are "discretionary" products and services, and the first thing to go when families have to tighten their budgets. I expect salons to recover when the Biden damage subsides.

Meanwhile, the implied volatility is around 0.3, roughly twice that of SPX. Great for covered calls. I have 100 shares in my IRA so I can sell a call.

All the same, since March (when I started tracking details), between the capital losses and call premiums my position is down $12400. It has been my biggest loser. I don't blame the stock. I blame the Biden economy. I'm bullish that ULTA will recover and thrive as the economy recovers. I'll just be quicker to drop it in the next economic downtown.
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Post by sweetandsour »

Well ... what a week this has been. I've been watching Intel and Corning, and I'm still watching. All of my play money is on the sideline, except for my equity index fund, which is up by about 20% for the year now. More earnings reports tomorrow. Not a good week for big techs. Although NVDA is tempting at 117; but I hesitate to get back in with that. Also still watching FTIA.
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Post by Del »

A lot of money has been rolling from S&P500 into small- and mid-caps. Russell 2000 (RUT) has surged tremendously. I lost $9000, having to adjust the call spreads twice this week to stay out of trouble.

Long small-cap growth investors are smiling ear-to-ear.
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