11 Successful Trades in the Month of December – See How We Did It
January 1st, 2021
Happy New Year! I know that like me, many of you are ready for a fresh start following the tumultuous (to put it lightly) year we have endured. In 2020, a global pandemic claimed more than 1.8 million lives and threw the economy into a recession the likes of which we had not seen since the Great Depression. The death of George Floyd prompted widespread protests against racial injustice. The West Coast burned as wildfires erupted, and we had a historic election.
We also witnessed the fastest bear market in history, with the S&P 500 plunging 35% between Feb. 19 and March 23. Thankfully, it happened to be the shortest bear market in history as well. Stocks surged higher and surpassed their previous records by mid-August.
After taking out the old highs, the market continued to gain momentum and soared to new record after new record. When all was said and done, the broader market advanced an impressive 16.3% for the year.We also saw volatility return to the market in a meaningful way in 2020, as is evident in the chart of the CBOE Volatility Index (VIX) below.
The elevated volatility drove up option premiums, so it was welcome news to my Option Income Blueprint members. Not only did it mean more cash in our pockets, but it expanded the universe of stocks we could trade for income. We capped off the year by closing 11 successful trades in December. Here’s a quick rundown:
Traders who sold just one contract of each could have earned $884 in income. As we look ahead to the new year, many analysts are optimistic on stocks.
Goldman Sachs, for instance, is forecasting the S&P 500, could rise nearly 15% by year end to hit 4,300. Others put the target closer to 3,900, which would be an advance of around 4% after 2020’s impressive run-up.
Where stocks will go from here is anyone’s guess. However, it is very likely we will continue to see elevated volatility levels in the months ahead.
And that means that, like 2020, 2021 will be a great year to be an options seller!