DailyPlay – Closing Trades (BIDU, GM) – May 22, 2024

Closing Trades

• BIDU – 59.42% loss: Sell to Close 4 Contracts (or 100% of your Contracts) July 19th $115/$135 Call Vertical Spreads @ $2.39 Credit. DailyPlay Portfolio: By Closing all 4 Contracts, we will receive $956. We opened these 4 Contracts on May 6 @ $5.89 Debit. The average loss, therefore, is $350. 
• GM – 51.30% loss: Sell to Close 9 Contracts (or 100% of your Contracts) June 21 $45 Calls @ $1.12 Credit. DailyPlay Portfolio: By Closing all 9 Contracts, we will receive $1,008. We opened these 9 Contracts on April 26 @ $2.30 Debit. The average loss, therefore, is $118. 

Investment Rationale

I want to address our current DailyPlay portfolio which holds 6 unrealized losing positions. Understandably, this has raised questions and is a learning opportunity for every trader. We have not been in such a position since the March 2020 selloff and our realized profits records speak for themselves. However, every trader will come across a point where you are faced with a series of consecutive losses. The short answer is that the best course of action is to stick with our Stop Loss rules and continue trading. We are only able to afford this if we followed the rules for position sizing when we entered these trades. The all-important 2% rule which is included with every trade signal ensures that even when you are faced with a series of losses, you are able to survive them and emerge on the other end and continue trading. Even if all 6 positions triggered their stop loss levels it would only result in a 6% drawdown in our portfolio. As we review our DailyPlay portfolio, BIDU and GM triggered their stop loss levels yesterday and require us to close those out. 

To review the 2% rule and how we build a profitable portfolio, please review my recent webinar on this topic, by clicking HERE.