Time to Evaluate My Strategies

How not to trade options — a series

Can I pull off another week of gains, or was last week a fluke?

For the trading week of December 4, 2020, I am making a few catalyst-related buys. Or, well, I am attempting to do so, as I am writing this before market open.

As an amendment to my “avoid buying at market open” rule, I have restructured that thought to allow for setting a reasonable price limit and, if it catches then so be it. However, if the price zips past my limit without making a purchase, I will not pursue the price upward. I will cancel the buy and move on.

With that in mind, I set up a Call option purchase for Ford (F) on the heels of Barron’s suggesting that the stock may double on the weight of recent sales upswings and improvements to production, as well as some strong entries into the electric vehicle arena.

On the brink of Cyber Monday, I have decided to add Walmart (WMT) back in the mix with a Call option to go with Best Buy (BBY) I purchased last week. I am hoping reports of strong online sales will boost stock prices and get a nice upswing in option value.

I am making one more buy based on watch list trends. I am going back in on a Call for Bloom Energy (BE) as they had a price dip last week but are trading at a slight gain pre-market and are likely posed for a nice modest lift over the next day or so.

I plan to keep a close eye on the cruise lines and airline stocks I have been monitoring (CCL, LUV, DAL) to see what they do this week. If they seem to be willing to continue their humble slope upward it will likely be worth purchasing Calls there, as long as I can time the momentum correctly, there should be some room to make a gain.

That’s it for this week. Last week was very strong, and I hope to build on that for this week as well.

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