DailyPlay – Closing Trade (COIN) Partial Closing Trades (GLD, GE) – March 7, 2023

Closing Trade

• COIN – 3.07% Loss: Buy to Close 1 Contract (or 100% of your remaining Contracts) Mar 10th $70/$54 Put Vertical Spread @ $7.71 Debit. DailyPlay Portfolio: By Closing the remaining Contract, we will be paying $771. We partially closed this trade on Feb 23 at 9.70 Debit when we closed 50% of our Contracts. Our average cost basis on this trade is, therefore $8.71 and our average loss is 16.38%.

Partial Closing Trades

• GLD – 50.21% Gain: Sell to Close 3 Contracts (or 1/3 of your Contracts) Mar 17th $168.50/$176.50 Call Vertical Spreads@ $3.65 Credit. DailyPlay Portfolio: By Closing the 3 of the 9 Contracts, we will receive $1,095. 
• GE – 68.13% Loss: Sell to Close 3 Contracts (or 50% of your remaining Contracts) Mar 24th $83/$77 Put Vertical Spreads @ $0.51 Credit. DailyPlay Portfolio: By Closing 3 of the remaining 6 Contracts, we will receive $153.

Investment rationale

Stocks were higher most of the day, but then a late decline actually took the SPX in lower territory before closing up 3 pts. No surprise; I don’t expect much to happen before Fed Chair Powell testifies today and Wednesday, and the big employment report comes out Friday morning. So, as I made it abundantly clear in yesterday’s weekly webinar, don’t push to trade until you have more sense of which direction the market is likely going to make its real move.

Yesterday’s daily SPX chart is below. Notice it stopped against the first of two downtrend lines that can be drawn and the Base Line. It would not surprise me if this backfills to the gap area from last Thursday to last Friday unless Powell makes investors very bullish this week.

SPX – Daily

Looking at open positions, let’s look to close the remaining COIN trade that expires on Friday. It’s hard to think that it can go back up to and past $70 in the next few days with it just under $63 now, and we’re virtually breakeven on them.

Let’s take profits on 3 of 9 GLD March 17th $168.5/$176.5 long call spreads as we’re up 50% on them.

Let’s also remove 3 of 6 GE March 24th $82/$77 long put spreads. We’re down 66% on them with 17 days to go, and the stock is trading near $87.

We’ll see if Powell moves markets at all later today, and potentially adjust more positions tomorrow. Don’t forget that even after this week’s Fed-speak and data comes out, next week we get the all-important CPI and PPI numbers. So, even a move this week can potentially get unwound next week depending upon how the numbers come in.