Amazing Trading Day on Friday — June 5 Trade Log
We had just confirmed that we could effectively place as many transactions as we like just as long as we always respected the limit on day trades set for trading accounts under $25,000. Thursday’s trading session left us with a sizeable portfolio, we bought several contracts to apply ladder strategies and on various underlyings as well as some other swing trades from other days we were already playing.
I woke up early to check how the account was doing premarket and I had an amazing surprise. Futures were really positive and many of our holdings had unimaginable appreciation. Ford, Macy’s, Under Armour, ExxonMobil and Southwest performed incredibly overnight after economic data of jobs and payroll was released and it showed that the unemployment rate had diminished and people were hiring once again. Markets soared all day after the big news and the four major US índices all ended highly positive off to the weekend.
Since the original investment and other extra fundings made to the account we were losing money, a few bad plays in the beginning had us on the negative numbers; by playing smart and patient we were able to recover almost everything, we were about $200 under. Friday morning was a completely different story, our head was finally out of the water and not only that but we were also winning, and winning good. The decision we had to make was whether to hold or cash in the long awaited profits.
CASH IS KING
It was with great effort that we managed to finally get the value of our account back to par, and not only did we bring it back but we surpassed it, I wanted to cash in, it would allow us to take off on a fresh start, or at least it felt that way.
Many of the underlyings had jumped a lot after really positive trading days; it is never certain if the rally will continue or stop but this time with such an overbuy the odds, at least in my perspective, were against us for a continued rally on Monday morning, our profits could have reduced. The profits were so attractive that we didn’t think about it too hard, we sold almost everything we had and were ready to start fresh.
FORD
We had a lot of Ford contracts, most of them were bought just recently for the ladder strategy, the others were a bundle of contracts we had bought a long time ago.
We sold the Ladder strategy and made profits from all of them, of course, Ford had jumped 10% in one day. Due to the shorter time to expiration on the contracts of the ladder the contracts appreciated a whole lot more than what the 10 LEAPS did. Even though it was effective, buying contracts with such a long time until expiration is maybe not the most profitable strategy for us at the time.
EXXON MOBIL
We cashed out the EXXON ladder as well quickly after the underlying jumped almost 8% on Friday.
UNDER ARMOUR
UA jumped 6.5% and it was a no doubter, we were quick to sell.
MACY’S
Macy’s rallied and gained more than 9%, we sold everything here as well.
SOUTHWEST
Southwest had an interesting and volatile movement on Friday, the rush and euphoria of everyone in the market drove the quote to win 10% at a certain point of the day, off course it was not able to hold the high price and returned to win a little less than 1% from the previous close.
We have seen that contracts are usually more expensive at the beginning of the session in cases like this where the market starts off really high or just the underlying itself. Since we already had decided to sell we quickly took advantage of the morning rush and took in profits.
OBSERVATIONS
Since the dip, technology had been guiding the rally for the stock markets, but the volume has been gradually decreasing from these stocks, most have reached their all time highs and only a few have been able to surpass it and with not much strength if they have, primarily the really big companies like Facebook, Apple and Amazon. Nonetheless, markets continue to rise, it appears to be that tech is no longer the leader and investors are looking for other undervalued options in the market to start pumping back to the pre-pandemic levels.
Volume in Airlines these past few days has increased significantly, consumer cyclical and financial sectors also seem to be hot for investors right now.
