Another Happy Monday and I sit here talking to myself about the markets and my upcoming trading week. No, I did not think I would have a million followers after a month, but it would be nice to have five. Or one. Perhaps if I posted more than once a week that might help. Or if I tell people I have a blog. Who knows.
Recent news has been completely negative, with the NABE survey coming out with recession predictions into 2023. Despite the cavalcade of negativity the S&P, Nasdaq and Dow were all up over 1% last week. Hard to believe after Thursday and Friday.
I have no idea where the market is headed in the near term. I don’t like many options out there but given the VIX is over 30 and the general direction of the market is lower, I am selling naked puts and perhaps looking more closely at big dividend payers. For those who are unfamiliar with the naked put, here is a lesson. In short, I am selling naked puts to gain some income in the hopes of buying some positions at lower prices. And I am doing so now because the VIX (volatility) is so high. When the VIX is high, options are much more costly and selling them can generate a significant amount of income.
Sell weekly SPXU, SQQQ or TZA puts 10% out of the money. If the markets drop, or they go up less than 3%, it’s free money. If you get “Put”, then hold the position for the inevitable change in direction.
PayPal
There was a news article out over the weekend regarding PayPal’s new proposed penalty practice. Lots of negative press. I have a hard time believing it is real and likely isn’t / wasn’t even legal so I’m really unsure where it came from. Perhaps a disgruntled employee? PayPal will likely dip and is headed lower in the medium term, but I am a believer in the overall FinTech space and am more so looking for buying opportunities here rather than milking the last dollar of downside. I am modestly long overall financials, with short puts on XLF.