Short Term Stock Trade Update
We remain with Alaska Airlines. Current price is $48.46. We bought it at $49.07. We remain with our short term target price of $56 (14% upside), should the 20 day moving average move below this we will adjust our target price accordingly. We will notify you when we exit the trade.
We also remain with Flutter FLTR.L on the LSE. Current price is £18545. We bought it at £18650. We remain with our short term target price of £20500 (10% upside), should the 20 day moving average move below this we will adjust our target price accordingly. We will notify you when we exit the trade.
Options, Futures & Fx Trade Update
Crude Oil Oct 29th Short $55 Puts for the December Futures contract:
This trade is going as planned. When we entered this trade Crude Oil was trading at $60. It is now trading at $61.71. When we sold our Put options contract the premium we received was $490 per contract. The value is now at $270 per contract meaning that we are in a profit of $220 per contract. There is still $270 of potential profit in this trade and we will do nothing for now.
SPY Financed Bear Put Spread: I’ve closed our SPY 660/650 bear put spread, which earned a premium of $134.
Our SPY $620 Oct 17th short put remains open. If SPY stays above $620 by October 17th, we'll make a profit of $35 per contract. SPY i currently at $671. Nothing to so with this trade.
While this is less than we'd hoped for, it's a solid example of how to short the market with reduced risk and still make a profit even if the trade doesn't move as expected.
The options portfolio is now up 42% for the year.
Long Term Stock Portfolio Update
This portfolio has had a strong year, with an annualized return on investment (ROI) of 24%. We've already closed out two positions, one with a 50% gain and another with a 30% gain, both achieved in less than six months.
Notes:
We recently added Alaska Airlines and Flutter to the portfolio.
Markets Review
U.S. stocks had a mixed day, with the S&P 500 and Dow Jones Industrial Average posting marginal gains, while the Nasdaq Composite declined. The markets were buoyed by significant merger and acquisition (M&A) news and strength in AI-related stocks. Key performance highlights include:
The S&P 500 closed up 0.36% at 6,737.22.
The Dow Jones Industrial Average fell slightly by 0.14% to 46,647.51.
The Nasdaq Composite Index, which is heavily weighted with technology companies, closed down 0.28% at 22,780.51.
Advanced Micro Devices (AMD) surged by over 23% following a major infrastructure deal with OpenAI.
In contrast, its rival, Nvidia, dropped by more than 1%.
Comerica (CMA) rose nearly 13% on news that Fifth Third Bancorp agreed to acquire it in an all-stock deal.
Tesla (TSLA) saw a significant climb of more than 5% after the company released videos hinting at a new, lower-priced car.
Palantir (PLTR) bounced back, gaining over 3% after a report about its battlefield communications system was clarified.
Bonds
U.S. Treasury yields rose across the curve. The market's focus was on the ongoing government shutdown, which is delaying the release of key economic data.
The yield on the 10-year U.S. Treasury note climbed by 0.03% to 4.15%.
The yield on the 30-year bond also increased by 0.05% to 4.76%.
The rising yields were seen as a reaction to the persistent government shutdown.
Commodities
Commodity markets showed broad gains, particularly in energy and precious metals.
WTI Crude Oil increased by over 1.3%, closing at $61.68 per barrel.
Brent Crude Oil also rose by nearly 1.5% to close at $65.48 per barrel.
The price of gold saw a notable increase of over 2% to $3967.07 per troy ounce.
U.S. natural gas (Henry Hub) closed higher at $3.39 per million British thermal units (MMBtu), gaining almost 1% on forecasts for cooler weather.
Foreign Exchange (FX)
The U.S. Dollar was mixed against other major currencies, with some weakness stemming from concerns over the government shutdown.
The dollar slipped slightly against the British Pound and Japanese Yen.
The British Pound gained 0.35% against the dollar.
The dollar remained largely unchanged against the Euro, trading around $1.17.
The ongoing political crisis in France also contributed to a more volatile trading environment for the Euro.
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