This is a Fundamentals-First Kind of Market
The S&P 500 narrowly avoided closing in bear market territory on Friday thanks to a comeback in the final hour of trading. But the broader market index still lost more than 3% for the week, extending the longest losing streak for stocks in decades.
At Options Income Blueprint, we closed two modest winners last week on travel-related plays Delta Air Lines (DAL) and United Airlines (UAL). Together the positions yielded $30 per contract sold for a 0.4% return on our capital.
While that rate of return is lower than we typically target, a market as volatile as this one requires that traders remain nimble and adapt. I’m willing to accept slightly lower-than-usual rates of return in the interest of protecting our capital and avoiding undue risk.
Another way I’ve been adapting to current market conditions is by placing an even greater emphasis on fundamentals. As I discussed here last week, since there is always a chance a put seller can be assigned shares of the underlying company, it is important that they would be perfectly fine owning shares, perhaps for an extended period of time. This is especially true when we’re flirting with bear market territory.
This focus on fundamentals, as well as real-world trends, leads me to one of the latest additions to the Options Income Blueprint portfolio: ZIM Integrated Shipping Services (ZIM).
We closed our first winner on the Israeli international cargo shipping company earlier this month. Last week, we opened another put trade after the company reported record income and better-than-expected revenue for the first quarter and upped its full-year guidance.
In the latest Options Income Weekly video, I review last week’s performance and take a closer look at ZIM Integrated Shipping Services’ fundamentals and how they are translating into income for members.
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