Ailing Insurer Delivers Healthy Profits to Spread Traders
As option sellers, we don’t really care if the broader market is headed higher or lower. We can profit when an underlying stays flat or even moves slightly against us.
But we’ve had some luck recently on the bearish side, using a credit spread strategy to trade an underperforming health insurer.
Learn more.
Economic Reports Confirm Smaller Rate Cuts Ahead
The inflation story in the U.S. continues to improve, but August’s Consumer Price Index report indicates that prices are slow to drop across the economy. The slowdown of inflation will prevent the possibility of a big Fed rate cut in the weeks ahead. The market is reacting positively since the uncertainty of the size of the rate cut is now becoming clear. But how long will the optimism last and what sectors are likely to continue pushing higher from here?
How We’re Trading a Rising Star in Fast-Casual Dining
This company is often compared to Chipotle Mexican Grill (CMG), both for its build-your-own-entree style restaurants and the meteoric growth it’s experiencing.
While the stock is bucking the trend of underperformance in the consumer discretionary sector, the sharp rise in shares this year warrants caution.
Find out how we’re trading this hot stock with a little extra protection.
The Fed’s Soft Landing Faces Turbulence
Treasury Secretary Janet Yellen says the U.S. is still on the path to a soft landing, but investors aren’t acting that way, selling off shares to make last week one of the worst weeks in a year. So what is it that she sees that investors don’t? How will the recent string of data affect the Fed’s decision to cut interest rates later this month? The previous two monthly jobs reports may show turbulence on the way to a soft landing.
Can The Pivotal Jobs Report Save The September Blues?
It seems like for months we’ve been focused on reports like the Consumer Price Index, Producer Price Index, and Gross Domestic Product growth. Everything had to line up perfectly to give us the soft landing, and for weeks, we were hoping to see a slowdown in growth just enough to give the Fed reason to cut interest rates. Now investors are getting that slowdown they asked for, but the stock market is falling instead. What can stop the fall and where can the market head from here?
Intel Setback Opens Door for Fresh Opportunities
Despite closing several profitable positions in August, Options Income Weekly members saw a net loss for the month after closing down a recovery trade in Intel (INTC). But with the capital we’ve freed up, we’re focusing on more lucrative opportunities in the technology and energy sectors.
Find out why we moved on from Intel and which new stocks we’re targeting here.
Nvidia Day Is Over – Now What?
With Nvidia representing 7% of the S&P 500, it’s no wonder why investors were held hostage to Nvidia’s earnings report, but now that is beyond us, what can we expect next? Before we get too far, Nvidia’s earnings remind me of years ago when I was trading Apple regularly and the stock got punished for making billions, but not enough billions in profit. Or they sold millions of phones, but not millions + 1. Nvidia’s earnings still show this market has room to go higher, but we’re still on fragile ground.
Big Defensive Win in VRT Yields 4-Figure Profit
Data-center systems specialist Vertiv Holdings (VRT) has become one of our go-to income stocks, offering profitable opportunities through both cash-secured puts and bull put spreads. However, when the summer tech-sell off hit stocks, we ended up being forced to play defense. But with some active trade management and a little help from the market, we ended up with our biggest winner to date on the stock.
Now, with our recovery trade closed, we’re back on the offensive.
Mission Accomplished
Despite investors’ hesitation toward the Jackson Hole Symposium, the event finished with the much-anticipated message from the Fed that it is now time for interest rates to come down. The market has already been pricing in rate cuts, so the next thing to watch for is how quickly rate cuts will be implemented. The market is pricing in a 0.25 basis point cut in September. How will this news impact trading for the week ahead?
The Fed’s Jackson Hole Gathering Brings Volatility
The Jackson Hole Symposium, a key gathering of central bankers and economists in Jackson Hole, Wyoming, runs from August 22-24. Powell is slated to deliver his remarks today at 10 a.m. Eastern time. The major indices fell over -0.05% yesterday, showing just how jittery investors are, waiting for a signal of upcoming Fed moves. You may remember 2022 when Powell spoke at Jackson Hole (a -5.5% move), but what does history have to say about the S&P 500 performance during this event?
