What a brutal week so far!
Monday started off with a $35 drop in the ol’ account by 7:00 a.m. PDT, and finished the day down $43. Tuesday started off positive with a quick $25 gain, but turned abysmal and ended up dropping $81.
Today was more of the same. This morning started off with an almost $75 drop, though we recovered most of those losses throughout the day and finished down $4.12. At the end of the day today, account value is sitting at $1,689.
Today’s Positions
- Canopy Growth Corp. (CGC): 40 shares @ $21.88 (0.69%)
- YETI Holdings, Inc. (YETI): 10 shares @ $26.74 (0.11%)
- Tailored Brands, Inc. (TLRD): 120 shares @ $4.39 (-2.01%)
There have been quite a few articles out recently about Canopy Growth Corp and the direction various traders believe the stock is heading. One interesting article posted earlier this week on Seeking Alpha was definitely not a fan of Canopy’s aggressive M&A activity and the company’s overpaying for the acquisitions.
Another author over on Motley Fool also dove into the supply and demand within the Canadian market. The analysis is that while CGC has positioned themselves as the largest producer in Canada, there will soon be a race to the bottom on prices as supply outstrips demand, leading to significant write-downs in goodwill that CGC is currently carrying.
I’m not a seller yet. Though it is definitely painful to see the losses continue to stack up in that position.
OptionAlpha Paper Trades
I decided I wanted to try my hand at a more complex trade in my OptionAlpha paper trading account with TD Ameritrade.
I saw AEM (Agnico Eagle Mines Ltd) had an extremely high implied volatility (IV Rank around 70, and IV Percentile around 88%). But, its technical charts were showing it was not significantly trending near a buy or sell signal. So, I decided to open up an Iron Condor with a high strike of $60 and a low strike of $50.
So in this options trade, all of the legs expire on October 18th. I’m selling the $60 Call, and buying the $65 Call, as well as selling the $50 Put, and buying the $45 Put. This has a max profit of $52, a maximum risk of $448, and an initial credit of $48.
It is really too large of risk for my account size, but since we trading paper money and I trying to learn these more complex trades I figured… why not?!
I opened the trade on Monday near market open, and so far it hasn’t moved much. At the moment it is a sitting at a overall profit of $5.09.
My other paper trades (call credit spreads on ADPT and TLRD) are also sitting about where they were — ADPT up $119 and TLRD up just shy of $20.
No More Fees!
Speaking of TD Ameritrade, yesterday morning Schwab announced they were getting rid of trading fees on stocks, ETFs, and options in US and Canadian markets (lining up Robinhood directly in its crosshairs). Stock prices for pretty much every broker fell hard on the news.
By the end of the day, I had an email in my inbox (at 9:40 p.m. PDT) that TD Ameritrade was following suit. They have also dropped fees to $0 on US stocks, US and Canadian ETFs, and option trades (except for a $0.65 contract fee with no assignment or exercise fees).
So that’s great news for my small account! One of the things I quickly realized in paper trading $2,000 is that the $5 to $7 fees per trade was going to eat my account alive. Big win!
FNMNY 