My Stock/Options Portfolio (MAY 2021)

what's going on everybody my name is chris and in today's video i'm going to walk you through my entire stock and options portfolio so it's been quite a rough period in the markets recently so i wanted to run through all these positions and just briefly talk through all the positions that i currently have open and then briefly talk about uh my thoughts on the market going forward and what i'm most interested in right now so if i open up my trading platform as many of you may know i trade with tastyworks i really like their platform super easy to use and it doesn't have a ton of super advanced functionality that is unnecessary for my purposes so for what i'm doing i absolutely love it so you want to learn more about tastyworks go ahead and check out the links down below but anyways let's go ahead and just look at what's happening in the markets recently so if we start with the s p 500 we can see that you know we're down a little bit in recent days but we haven't seen a massive sell-off in the s p 500 itself now the s p 500 is an index that tracks large cap companies in the united states so let's go ahead and look over to the nasdaq so this is where the bloodbath has really been recently and the nasdaq represents technology companies and therefore since we've seen a big sell-off in the nasdaq and not so much in the s p 500 most of the performance that i've seen recently and the losses that i've exceed that i've seen recently have stemmed from the sell-off in technology stocks so if i head over to the positions tab what i'm going to do is i'm going to sort my positions by net lick and this stands for net liquidation value so essentially what this is showing is i'm sorting my positions from largest to smallest so if we start with tesla tesla has been the largest position for a while and that's mostly because i purchased shares of tesla at around two hundred dollars per share the trading platform actually doesn't recognize that because it says i purchased at 815 dollars a share and now they're at 666 but i actually did a video not long ago where i described a mistake i made with my tesla position and essentially i had purchased 70 shares at an average price of around 211 dollars per share and through a tesla earnings report i purchased out of the money put options against tesla and i actually forgot to close those puts when they expired and they expired a few dollars in the money and what that did is it resulted in me actually selling all of the tesla shares that i had at that higher strike price which was i believe 800 and what i ended up doing is since i owned 70 shares i had to short 100 shares essentially through the assignment of that put option and i ended up with a short share position of 30 shares so what i did is i bought back those shares and repurchased the 70 shares at the higher share price of 815. so a large portion of this gain has been from the appreciation of the shares in tesla shares as the average purchase purchase price in reality is closer to 200 but then we can see i have all these other call option positions in tesla as well if we look at this ds open column we can see that a lot of these positions have been open for quite some time so this column is representative of days open so the number of days that have elapsed since i opened up these positions so this first position here is the 700 800 call spread i've talked about this a lot in live stream videos and basically this is a risk-free call spread since i purchased the 700 call for 118 and then later that same exact day tesla had shot up like a hundred dollars per share or something like that and i was able to short the 800 call for 118 dollars therefore creating this 100 wide call spread for a net entry cost of zero so this is a risk-free trade and i if both of these options go to zero then my entry cost of zero dollars means that i won't lose anything from my starting position the only thing i can lose from here is the unrealized profit at this point then we can see i have a bunch more call spreads that i've been in for a little bit longer than that and then more call positions as we can see here so basically my tesla position started as long shares and then a bunch of aggressive long call positions in super far out expiration dates and then as tesla started to increase i started to turn those trades into risk-free call spreads to reduce a lot of the risk in the position in terms of the option portion but also to reduce my directionality so by taking the long call position and converting it into a short or long call spread by shorting calls against those long calls i actually reduce the directionality of the position so if you look at the delta value of the long calls those are obviously really positive and that means if the option position has a positive delta what that means is the position is expected to make money at the stock price goes up but lose money at the stock price goes down so if we look at the short option components the short call components these all have negative deltas which means they are expected to make money if the stock price goes down but lose money at the stock price goes up so these negative delta short calls actually reduce my bullish exposure in tesla and it reduces it by just offsetting the positive deltas that are observed in the long call portions so if we move down the list here we got nvidia again purchase nvidia shares at 316 dollars per share they're currently at 580 per share so there's a nice gain on those shares um just like i have in tesla i do have some long call leaps position so long term call option positions that expire in 624 days from now so they have quite a ways to go and these are both out of the money call options as of right now these positions aren't really doing much as you can see i purchased the 700 call for 88 dollars currently at 78 dollars so a loss of a thousand dollars there and then the 900 calls were purchased for 35 dollars and 30 cents those are currently at 39 so a small gain there but overall up in nvidia due to the big increase in the share price if we go down the list to microstrategy this is probably one of my favorite positions because this was a play on bitcoin so if you're not familiar with microstrategy the ceo michael saylor he was the first person to come out and put put bitcoin on the balance sheet of a publicly traded company in in serious fashion so he converted the company's balance sheet the cash that they had in the balance sheet he converted a hundred percent of that into bitcoin and publicly came out and said we are doing this because we believe that bitcoin is a better place for our cash because cash is losing purchasing power over time and especially with the aggressive money printing that we're seeing in the usa he was basically saying his big stack of cash is like a melting ice cube and so he wanted to take that cash and put it into something such as bitcoin which is has the complete opposite monetary supply as the us dollar because bitcoin itself has a disinflationary supply schedule meaning that every four years there is a reduced amount of new bitcoin that are issued every single day and if you look at the curve it looks something like this so it flattens out near the top whereas the us dollar supply is actually increasing at an exponential rate so he came out and announced that he put the entire cash position on the balance sheet of microstrategy into bitcoin and at that point microstrategy essentially became a bitcoin holding company and that means that if bitcoin were to increase in value since microstrategy had a ton of bitcoin on the balance sheet that would mean that microstrategy's valuation as a company would increase with increases in bitcoin and he also got even more aggressive than that by taking out a billion dollars in debt and basically borrowing us dollars to buy more bitcoin and that was a super aggressive play so everyone was like all right this michael sailor guy is serious um so he was kind of the the first mover in the space of publicly traded companies who put bitcoin on their balance sheet so what i did in terms of options is i purchased deep out of the money call options in microstrategy thinking that bitcoin is going to go up because i'm personally bullish on bitcoin long term and since microstrategy held so much bitcoin on their balance sheet and still does today i basically had the assumption that as bitcoin would go up so would microstrategy stock and that's exactly what we saw so i did purchase the 500 call in microstrategy and then at a later date after microstrategy surged in value i shorted the 1000 call in the same exact expiration cycle if we look at the trade price of these two call options we can see that i purchased the 500 call for 78 or costing 7 800 and then at a later date i shorted the 1000 call for 210 therefore collecting 21 000 into my account and what this leaves is a 500 1000 bull call spread that was entered for around a thirteen thousand dollar credit which means if both of these call options went to zero dollars then i would make thirteen thousand dollars on this trade so i have a guaranteed profit in this call spread position in microstrategy now very recently microstrategy was tanking and that was due to a decrease in the bitcoin valuation so what i did is i actually purchased another deep out of the money call and microstrategy at the 1800 strike which at this point is 200 percent above the current stock price of 600 now while that's very aggressive it's important it's important to point out that these call options that i've purchased have 624 days until expiration and so what i'm thinking here is that if bitcoin doubles in value then microstrategy should double in value as well since at this point a large portion of the company's valuation is tied to bitcoin so over the next year or so if bitcoin goes up by 100 then microstrategy should see insane increases in its stock price because it is tied to bitcoin at this point and if microstrategy stock increases significantly then these deep out of the money call options are going to appreciate in value in a big way so i'm super bullish on microstrategy but i didn't want to time it as a short-term trade and that's exactly why i went to the furthest expiration cycles i could find and right now that is the january 2023 cycle in microstrategy options so that's definitely my favorite position right now just because of the thesis behind it if we open up spy we can see that currently i have some long call spreads here so 240 days ago i purchased the 450 calls in the december 20 let's see here december 2022 and 2023 so the shorter term ones are in 2022. so i purchased the 450 calls and my reasoning behind that as i described in a recent videos video called investors in 2021 are in big trouble i outlined that there's no returns to be made right now in lower risk asset classes so if you're holding cash if you're in a savings account if you have cds or if you're even in bond positions all of those positions right now have negative real returns which means the returns that you can expect in those positions do not outpace inflation and that means that any money that is tied up in those positions is actually losing purchasing power over time and because of that investors are incentivized to purchase higher risk assets such as buying into the stock market and so my thesis behind that play was that i wanted to be bullish spy and so i purchased deep out of the money options in spy in way far out expiration cycles we can see that i initially purchased the 450 calls 240 days ago but then 85 days ago so three months ago i actually shorted five of the 500 calls in the same exact expiration cycle again i collected more on the short calls than what i paid initially for the 450 calls so these are risk-free call spreads as well so as you're noticing here there's a theme in that it's i purchase out of money call options in products that i think will appreciate and once those products or if those products do experience appreciation what i do next is i short a higher strike call against the calls that i've purchased and my goal with that is number one to reduce the risk or eliminate the risk of that position entirely and that is accomplished if i can short a call option for a greater premium than i paid for my lower strike call but what it also does is it decreases my directional risk so if i buy a call option and the stock price increases my sensitivity to further increases or decreases in that stock will increase and so as the stock price increases and as i own a call option what i do to reduce the risk of a correction in the other direction is i'll actually short call options against those initial option purchases and as i mentioned before if we look at the deltas of these two positions we can see that if we look at the 450 calls in spy the delta of those calls is 195 positive 195. but if we look at the delta of the short 500 calls the delta is negative 92. so if we basically sum those two position deltas we get a positive 103 which is much lower than the positive 195 i would have if i just held the long calls so by creating a call spread you reduce your directional risk in both directions but the reason i do that is because as i'm correct and as the stock price is increasing i want to take some risk off the table and reduce my losses should a correction occur so if we move on from there we can see that i do have some stuff in square pretty much the same story throughout all of these different stocks so in square i do have shares that were purchased at 147 currently at 225 nice gain there on the shares 170 days ago i purchased the 290 calls in square for 29.50 those are currently trading only slightly higher at 31 dollars per option if we look at the next strike up i purchased more square call options at 360 and i did these three months ago or 94 days ago i purchased these options for 29 and they're currently at 19 which means i do have a pretty notable loss on that portion of the trade however you will notice that 23 days ago i shorted two of the 420 calls in square collecting 27 dollars per option and currently these options are at 12 each so i have a 15 or hundred dollar gain on each of these contracts and if we multiply that by two we get a profit on those short calls of three thousand so again getting back to managing the risk when i'm right the the reason i was able to short these 420 calls for 27 is because i did it after i had initially purchased the other call options at lower strike prices so if i buy call options at this strike price the stock price goes up then that means a call at a higher strike price may have a price equal to what i paid for that lower strike call and so again this protects me from decreases in the future so as we can see here while i am down on the 360 calls here i'm down about 2 200 my profit on the short 420 calls is 3 000 which more than makes up for the loss that i have on the 360 calls so again basically what i'm doing is i'm finding companies or products that i believe will increase in the next six to 12 to 18 months and i purchase out of the money calls in those stocks and if i'm right and the stock price goes up then my first plan of defending that trade is actually to short calls at a higher strike price therefore decreasing my directional sensitivity through a decrease in the positions delta but also it protects against future losses because if i short that call and then the stock price comes back down i'll have a profit on that short call position which will offset the loss on the long call position so that's how i've been playing the game recently if we keep going down we can see i have some ij8 shares this is an s p 500 mid cap so this is not small cap stocks but it's not large cap stocks sits right in the middle so ijh is kind of thought of as a happy medium between investing in larger more mature companies which reside in the s p 500 and the higher risk more volatile more uncertain small cap stocks so sitting right in between those is the mid caps and that is what ijh represents really quickly i want to just go through the stock positions that i have so if i uncheck the options filter this will just pull up all of the positions that are only shares so as you can see if i click on tesla it'll only share it'll only show the share position since i've unchecked the options filter so basically removes all the options from view and this makes it very easy to see which which products or stocks that i own shares in so if you just go down the line i own shares in ijh nvidia square envite appian facebook adobe the trade desk shopify teledoc health so there's a lot of open share positions that have been in the portfolio for a while now and that's why a lot of these have pretty sizable increases because they were purchased in 2020 when the market valuation was much lower so if i go back to the options filter i'm going to uncheck the stocks just because we don't really need to talk about those in depth we can keep going down the list so you know i have some big losing positions here so we can see in vitae i did use that out of the money call strategy and i purchased these options for fifteen dollars they're currently trading for two dollars um since i did that seven times the loss on that position is nine thousand dollars um twilio we can see the same thing bought the call for 47 now it's at twenty five two thousand dollar loss there um united airlines i've had these positions for a while this was kind of a long shot bet in the coronavirus you know being solved and travel resuming to normal and you know there's still a lot of time in these options we still have 260 days to go but these strike prices are at 80 and 100 and with united airlines at 53 that's obviously a ways to go vxx i recently purchased some deep out of the money calls in a very near-term expiration and this was just as a market hedge just in case we saw a big decrease in the overall market which usually results in a big increase in the vix index and vix futures and vxx itself tracks the near-term vix futures contracts so basically if the near-term vix futures increase which they will if the vix index increases then vxx itself will increase so by purchasing deep out of the money call options in a short term expiration cycle i was able to spend a very small sum of money relative to the account size and get a lot of protection in the event of a near-term correction but the downside of doing something like this where you're buying short-term protection is that you continuously have to buy more protection once the current protection expires so while you do pay a smaller premium compared to buying longer term protection um you know you're going to have to roll that protection forward in time so once these options expire i may revisit the strategy depending on what happens in the market so yeah so coinbase same thing bought the 500 call that has 630 days to go bought the 500 call with uh lots of time left bought it for 51. it's at 26 so about a 50 loss there tsm this is a semiconductor company about the 150 calls for 15 another at nine so that's small loss there if we go to apple we can see that 234 days ago i purchased five of the 200 calls in apple for 909.50 those are currently at 430 and then 42 days ago after apple had declined i purchased more of the 200 strike calls for dollars and forty cents and those are at five dollars so down slightly there um and then i guess visa can wrap it up visa and nvidia um again more long call positions here and basically the same story so if we look at the p l open of all these positions we can see that there are some big gains in the top few stocks but you know there are some sizeable losses in these bottom few stocks as well so not every position is working out but that's why my strategy is to reduce the risk of the positions that do work out because by doing so i eliminate the potential for a big winner to turn into a big loser so the name of the game for me is if i do have a big winner what i want to do is reduce the risk in that position and that helps me stay alive and survive longer so as of as i just mentioned recently we're seeing a big decrease in the market and that's mostly because this position is tech stock heavy this portfolio is tech stock heavy and we've seen a sizable decrease in technology stocks as of late so definitely in the house of pain as they say um but i'm hanging in there right now my forecast for the future obviously i can't make any specific predictions but my general thoughts are that i'm uninterested in stocks and options at this moment i think the number one opportunity on the board right now is bitcoin and as i mentioned earlier if we look at the low risk asset classes or positions so if we look at cash savings accounts bonds or something like gold all these positions are losing purchasing power over time but in the case of gold gold is actually down this year while basically every other asset class is in the positive territory and so i'm not investing in gold i'm not holding cash or at least i'm not cash heavy i'm not investing in savings accounts because they're yielding zero percent basically like holding cash you're losing purchasing power over time i'm not investing in bonds because if i were to buy a us government bond yielding one and a half to two percent or something like the 30-year bond which is slightly over two percent that's not really giving me an attractive return in terms of real terms so if i have a 2 2.3 yield in a 30-year government bond and inflation's two percent then my real return per year if inflation is two percent is 0.3 percent and if inflation runs higher which the federal reserve has openly stated that they're going to let inflation run hot for a period of time that's not what you want to hear as a bondholder so cash savings accounts bonds gold are all out for me stocks are obviously at lofty valuations because if we look at if we look at where we are today versus where we were before the coronavirus even started we can see here by this chart the s p 500 before the coronavirus stock market crash the s p 500 was around 3 400. and now we're at 4200 and the world economy is not yet reopened so i think a large portion of this increase is because people have nowhere to put their money to earn positive real returns in lower risk asset classes and therefore they're incentivized to push their money into higher risk asset classes such as the stock market but with the stock market at such lofty valuations right now you know obviously we can argue that if the valuations are lofty then going forward the expected returns should be lower compared to if we were buying the s p 500 last march when you know we were at the the trough of that big sell-off so the valuations in march of 2020 were much lower than they are now and therefore the forward-looking returns in stocks is arguably much lower and if you think that the forward-looking returns are lower and there's still a lot of downside risk then that's not a great place to put your money in terms of risk to reward so that brings me to bitcoin why is bitcoin the thing that i'm focusing on right now it's because while bitcoin is new and it is volatile those things don't really bother me i believe in bitcoin as a savings technology and this is how a lot of very smart people refer to it as and the reason it's a savings technology is because you can't be diluted when you buy into bitcoin as you build your stake in that asset class you can't be diluted through things such as rapid inflation of the supply of that asset which is exactly what's happening in the us dollar and with a wall of money coming to bitcoin through etfs coming online which will be a serious demand increaser for bitcoin because you're going to have all these people buying the bitcoin etfs and that money is going to flow into bitcoin i think that the upside potential in bitcoin is massive given that yes it is a volatile asset class because it is new um but compared to the downsides and the potential return right now i think that bitcoin for me is the best asset class to put my money into you

Channel: projectfinance

Views: 25,231

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Keywords: projectfinance, projectoption, chris butler, stock market, finance, options trading portfolio, option positions, stock positions, revealing my stock portfolio, revealing my option portfolio

Id: sCBL49v1SJs

Length: 28min 22sec (1702 seconds)

Published: Thu May 06 2021