Last Week's Income Report: October 11th, 2021
We Booked 5 More Winners Despite the September Slump
September was one of the most volatile months on record.
After swinging in both directions:
The Dow Jones Industrial Average lost 4.5% in September
The S&P 500 lost 5.2%
The Nasdaq lost 5.1%
All thanks to fears of inflation, geopolitical risks, the coronavirus, slowing economic growth, skyrocketing oil prices and unemployment numbers that were worse than expected.
In fact, September payrolls added 194,000 jobs for the month, which was well below expectations for 500,000.
Of course, that could push tapering off a bit longer.
“Federal Reserve officials are watching the jobs numbers closely. The central bank recently has indicated it’s ready to start pulling back on some of the extraordinary help it has provided during the pandemic crisis, primarily because inflation has met and exceeded the Fed’s 2% goal,” says CNBC. “However, officials have said they see the jobs market still well short of full employment, a prerequisite for interest rate hikes.”
Fortunately, despite the chaos, Options Income Blueprint still managed to close another five winners for the month of September. Those who sold just one contract of each earned $176 in cash.
That brings our year-to-date cash total to $6,162.
Here’s a rundown of September’s winners:
Let’s take a closer look at the three names on the list.
First up is Marvell Technology (MRVL). Throughout September, we booked three separate wins on the semiconductor stock.
MRVL is one of our Options Income Blueprint core stocks. This means it is a name we plan to trade with great frequency, as it throws off a lot of cash.
We began trading MRVL in Options Income Blueprint in September of 2020. Using a mix of puts and covered calls, we traded it successfully four times between then and early 2021, pocketing $369 in cash.
Our next trade on Marvell Technology came in mid-February, just before the stock was caught up in the broader tech sector sell-off. But, as you know, I refuse to take losses on fabulous companies when there has been no shift in the fundamental story.
Marvell Technology is one of my favorite semiconductor companies, and with an ongoing global chip shortage fueling even more demand, I saw no reason to cut and run.
I recommended an active recovery strategy — rolling puts, accepting shares, selling calls and rolling them, getting called out and then selling puts again.
When all was said and done, we exited the position with a small profit in early August. If we had given up early on, we could have booked a loss of up to 24% on the trade.
We began selling options on the stock again in mid-September, which resulted in three quick wins and $96 in income.
With analysts saying chip shortages could persist well into 2022, volatility in semi stocks is likely to remain elevated. That’s a good thing for option traders like us, though, as heightened volatility means heightened premiums for the options we sell.
Next up, we have Walgreens Boots Alliance (WBA). While not one of our core stocks, this is a name we have traded four times since mid-May. We’ve closed three winners and one loser, earning $99 in income.
Over the past few months, the company has been working on a turnaround plan to cut costs and reallocate capital to stronger opportunities. Management said it is on track to deliver more than $2 billion in annual cost savings by fiscal 2022.
Members can expect more trades on WBA in the weeks and month ahead.
Finally, we have Citigroup (C), which is another one of our core stocks.
Between late July and the end of September, we’ve traded the stock five times, earning $223 in income.
Some of you might be asking why we trade the same stocks over and over again in Options Income Blueprint. The answer is simple: We’re here to make money.
I’m not concerned with trading the most exciting stocks or the latest SPAC merger, or with what the Reddit crowd is saying. At the end of the day, that’s just noise.
If you’re like me, making money is exciting enough on its own.