Last Week’s Income Report: March 22, 2021

Last week marked the one-year anniversary of the second-steepest sell-off in S&P 500 history. 

On March 16, 2020, the broader market index plummeted 12%. The only day in which the S&P 500 had ever lost more was October 1987’s “Black Monday.”

This week will be one year since the S&P 500 troughed on March 23. Following that low, it took stocks just five months to reach new record highs. And in the past year, the global stock market has added $40 trillion in value — after losing $21 trillion.

If you’d talked with even the most confident bull one year ago, I doubt they could have foreseen such an epic run. Of course, no on can actually predict the market’s movements.  

I often get asked when I think the market or this or that stock will hit a bottom or top out. I respond by saying that if I knew that, I’d never show up for another day of work in my life. 

If anyone could truly predict where the market was going, they wouldn’t need to trade for a living — or do anything else for that matter. 

One of the benefits of selling options for income, like we do at Options Income Blueprint, is that it doesn’t rely on market timing. We can make money in both up and down markets, or even when stocks don’t go anywhere at all. 

Case in point: We’ve already closed six profitable positions in March, despite the extreme choppiness in the market. Traders who sold just one contract of each could have earned $468 in income. 

While didn’t actually close out any Options Income Blueprint trades last week, we did put on three new trades, two of which were on brand-new names for us.  

The first was on Yeti (YETI), which makes high-end outdoor and recreation products, such as coolers and drinkware. I knew of the brand but actually took a look at the stock based on a member suggestion. Lo and behold, I liked what I saw in the charts and option chains very much!

We sold an April monthly put for $4.35, or $435 per contract. That’s a big chunk of cash, and we’ll net a return of 5.8% in 30 days, or 71% annualized, if this option expires worthless.

Of course, I’m more than willing to close the position early if we have a large enough profit sitting on the table. 

The other new name we traded last week was the iShares Global Clean Energy ETF (ICLN).

This diversified alternative energy fund offers exposure to companies involved in solar, wind, biomass, ethanol and geothermal electricity production. It also offers exposure to semiconductors and semiconductor equipment stocks. 

We picked up $0.45, or $45 per contract, by selling a put that expires this week. If the stock closes above our strike price on Friday, we will earn 2% in nine days, or 81% on an annualized basis. 

However, as with YETI, there’s a good chance members will be booking profits early.