Short Term Stock Trades
Alaska Airlines: Current price is $48.27. We bought it at $49.07. We remain with our short term target price of $55.
Flutter (FLTR.L): on the LSE. Current price is £18690. We bought it at £18650. We remain with our short term target price of £20500.
MGM: Current price is $31.57. We bought it at $32.27. We remain with our short term target price of $35.
Dominos Pizza: Current price is $408.26. We bought it at $409. We remain with our short term target price of $429.
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 $59.73. When we sold our Put options contract the premium we received was $490 per contract. The value is now at $370 per contract meaning that we are in a profit of $120 per contract. There is still $370of 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 is currently at $663. 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 43% for the year.
Long Term Stock Portfolio Update
This portfolio has had a strong year, with an annualized return on investment (ROI) of 21%. 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.
Markets Review
U.S. stocks rebounded on Monday, recovering from a sharp downturn on Friday. The rally was primarily driven by a "softer tone" on U.S.-China trade relations following a social media post from President Donald Trump. Technology stocks, which were hit hard on Friday, led the gains. The U.S. bond market was closed for the Columbus Day holiday.
U.S. Stock Market
Major Indices: All three major U.S. indexes closed higher. The Nasdaq Composite had the strongest performance, rising 2.2% to close at 22,694.61. The S&P 500 rose 1.6% to 6,654.72, and the Dow Jones Industrial Average gained 1.3% to end the day at 46,067.58. The Russell 2000 index of smaller companies also saw strong gains, increasing by 2.8% to 2,461.42.
Sector and Company Performance:
Technology: Tech stocks bounced back significantly. Broadcom (AVGO) surged 9.9% after announcing a partnership with OpenAI for custom AI accelerators. Other chipmakers like Nvidia (NVDA) and ON Semiconductor (ON) also advanced, up 2.9% and 9.6% respectively.
Rare Earths: Domestic rare earth stocks continued to climb on easing trade tensions. MP Materials (MP) was up 9% and USA Rare Earth (USAR) rose 18.3% in pre-market trading.
Other Notables:
Bloom Energy (BE) soared nearly 30% in pre-market trading on news of a deal with Brookfield Asset Management.
Walt Disney (DIS) rose 2% after announcing a deal to stream a Taylor Swift docuseries.
Fastenal (FAST) was the biggest loser on the S&P 500, falling 7.5% after missing earnings expectations.
Casino operators like Las Vegas Sands (LVS) and Wynn Resorts (WYNN) declined due to lower-than-expected September gaming revenue in Macau.
Bond Market
The U.S. cash Treasury market was closed on Monday for the Columbus Day holiday. As a result, there was no trading in Treasury yields.
Commodities
Precious Metals: Gold continued its recent rally, reaching a new record high of $4,078. The price was supported by ongoing geopolitical uncertainty, concerns about the U.S. government shutdown, and expectations of future rate cuts.
Energy: Crude oil prices rebounded, and natural gas (Henry Hub) closed up by 0.39% to $3.10 per million British thermal units (MMBtu).
Forex and Cryptocurrencies
Forex: The U.S. Dollar Index, which measures the dollar against a basket of currencies, was 0.3% higher. The dollar rebounded against the Japanese Yen and the Euro after Friday's sell-off.
Cryptocurrency: Bitcoin (BTC) rebounded from a low of about $107,000 on Friday, trading at around $116,000 in late-afternoon trading on Monday. The recovery came after President Trump's conciliatory comments on China. However, Bitcoin remains about 8% below its recent record high of over $126,000.
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