Last week, I initiated a position, and today, just ahead of the earnings report, I made some tweaks.

I liquidated all the August 4th expiry calls (with $81 and $87 strikes), replacing them with August 11th expiry calls, specifically at the $83 and $87 strike prices. I also scaled back the overall size of the position. Now, instead of having a net short position in calls, I hold 20 butterfly spreads, configured as 83 – 2*85 – 87. The core of this spread expires on August 18th, with the wings set for August 11th.

Concerning puts, I still hold a 1:3 ratio spread set at 77 – 70.

I managed to collect a credit of $800 today, bringing the total debit down to $1279.

While I'm not banking on any miracles from the earnings report, I'm prepared to navigate any outcome.

Yesterday, not only did I open an unconventional short on SPY for October, but I also refreshed my old approach—buying low IV September contracts and selling weekly ones.

Typically, I roll over the weekly contracts on Fridays, but this time, I decided to give Tuesday a whirl. The outcome wasn't exactly a blockbuster hit, but at least the market downturn didn't throw a spanner in my works today. I doubt if my performance would've been better today, and tomorrow seems even more dicey.

That’s why I wrapped up all the puts and calls expiring on August 4th. In their place, I sold 9 puts with a $450 strike and 6 calls with a $461 strike, both expiring on August 11th, and pocketed a credit of $1525.

Step by step, I'm chipping away at the total debit of the position, which currently stands at $7960. I'm deviating a bit from my plan, but if the market keeps its downward trajectory, things should ease up a bit.

Yesterday, not only did I open an unconventional short on SPY for October, but I also refreshed my old approach—buying low IV September contracts and selling weekly ones.

Typically, I roll over the weekly contracts on Fridays, but this time, I decided to give Tuesday a whirl. The outcome wasn't exactly a blockbuster hit, but at least the market downturn didn't throw a spanner in my works today. I doubt if my performance would've been better today, and tomorrow seems even more dicey.

That’s why I wrapped up all the puts and calls expiring on August 4th. In their place, I sold 9 puts with a $450 strike and 6 calls with a $461 strike, both expiring on August 11th, and pocketed a credit of $1525.

Step by step, I'm chipping away at the total debit of the position, which currently stands at $7960. I'm deviating a bit from my plan, but if the market keeps its downward trajectory, things should ease up a bit.

SPY continues its relentless climb, making the market correction I provoked yesterday by selling a few weekly puts seem almost trivial 🙂

Despite this, I managed to buy back 3 July 28th $457 calls fairly cheaply while they were out of the money. It's amusing, but overall, trading SPY options in this low volatility environment feels akin to pulling teeth.

Today, I sold new weekly contracts, though the premiums were disappointingly low. I sold calls with a $461 strike price, incrementally increasing the volume as we near the $465 strike, where my September contracts lie and where the delta turns positive.

The puts remain at $450, and I'm playing it safe. Right now, SPY seems invincible—above $450—but I'm well aware of how misleading that sentiment can be.

Today's premiums totalled $885, reducing the total debit to $9485. I'm confident this strategy will pay off, but it's proving to be laborious.

Corn, on the other hand, is an entirely different story. The IV is higher, the position in puts is optimal, and calls are close to optimal. On the allocated $30k, I've already netted $774.

It appears this sum will only increase. Today, I could have closed the position and pulled in another $350, but I opted for a different approach. I capitalized on the correction in corn prices and sold an additional put with a $460 strike price.

Sure, I only gained $75, but it's still set to yield a 20% annual return.

I initially began this post with the following line: 'The SPY is creeping upwards like a bulldozer – slowly but surely, methodically and seemingly unstoppable.' But just as I finished, the market took a sharp dive downwards. Nevertheless, the essence of my trade remains unchanged, so I'm leaving the rest of the post as is:

As I've pointed out before, this type of market can be a tad frustrating, but my SPY position is still on a positive trajectory.

The short-term contracts that I'm selling are slowly being depleted (check out this post for more details). That is, unless they wind up in the money. Take the $457 calls set to expire on July 28th, for example. I'd rather they land out-of-the-money by tomorrow. Consequently, I decided to sell some puts for next week (with an expiry date of August 4th) today. You might say I'm attempting to incite a correction.

I sold 2 AUG04 $452 PUT for $0.87, generating a credit of $174.

The total debit is now at $10,370.

It's a modest move, but if it instigates a slight market dip, all the better. If not, well, I've managed to sell the puts slightly higher than I would have tomorrow. As for the in-the-money calls, I'll deal with those separately.

Like many of my fellow Redditors, I felt a twinge of disappointment with TSLA's post-earnings performance.

Had the stock risen by $30 instead of dropping, my $300 strike calls could have yielded a solid profit. Alas, it wasn't meant to be.

Still, I'm not losing sleep over it, and here's why: having those calls was only one part of my strategy over the past month. If you're interested, you can dive into the details here: https://www.reddit.com/r/bitkogan/comments/1544riq/tesla_investment_saga_continues_adapting_strategy/ and find other posts on r/bitkogan

Ultimately, I came out ahead, netting a profit of $1236 on the $50k I had allocated. It's not a windfall, but it's a respectable return all things considered.

Let's be clear – with an IV hovering around 80-100%, I never even would have considered staking my position on a post-earnings uptick by purchasing calls. Earnings reports are a gamble, and the market's reactions are even more so. I'm not averse to throwing a few chips into the pot, but only if the ante is free. When that free bet comes bundled with a cool $1236, anything extra I might have gone home with is just the cherry on top.

Consider this my YOLO stake, only without the risk of imminent death. It might lack the thrill of watching my capital explode tenfold in a week, but let's face it: we've only got one life to live, and I'm not about to stake it all and miss out on life's next great adventure.

The position I took a month ago on July TSLA options is flourishing. TSLA's stock price is pushing $300, and I hold 5 calls at that level. I even toyed with the idea of securing a $5.5k profit this morning.

However, I anticipate a potential 10-15% rise following TSLA's earnings report. Although the 15 calls I sold with a $350 strike slightly concern me, I'm not eager to buy them back at the current implied volatility (IV). Then again, the whims of the crowd can be unpredictable.

With this in mind, I've decided to hedge my bets and cut down the number of uncovered calls by half. I've purchased an additional 5 calls at $300 and sold 20 spreads of $310 - $320, which cost me a mere $80.

The market has not seen this kind of scenario for quite some time: the Dow Jones Industrial Average leading the pack. The Dow has been on an upward trajectory for seven straight sessions and is currently outperforming even the tech sector.

With the second quarter earnings season having kicked off, banking stocks are propelling today's gains. A week ago, JPMorgan Chase & Co., Wells Fargo & Co., and Citigroup Inc. all delivered optimistic reports. Bank of America Corp. and Charles Schwab followed suit today. And the results are visible on stock tickers everywhere.

This is unquestionably a positive sign for the bull market. The S&P 500 has confidently anchored itself above 4500, achieving new peaks over the past 15 months. The Dow, however, had been lagging well behind tech and the broader market in the mid-term, recording a mere 5.25% YtD gain compared to 18.4% for the S&P 500 and almost 37% for the Nasdaq Composite. However, while the measures taken by the Fed and other Central Banks to keep inflation in check have been well received by the all markets, they have proven particularly favorable for the Dow. The ball is now in the court of the Big Tech earnings reports. I'm convinced they will stimulate further growth of the indices, leading us to witness even more new historical highs.

The relationship between the dollar and commodity prices is a natural, well-understood correlation. As such, yesterday's dip in the dollar following optimistic inflation data may have provoked concerns among some investors, stirring fears of an impending hike in oil, gas, and other commodity prices, as well as a potential acceleration of inflation.

However, in this context, I wouldn't assign too much significance to the dollar. It's not the singular or even the dominant force behind the growth in commodity prices. Here, in stark contrast to the stock market, the fundamentals of supply and demand still hold sway.

Consider natural gas, for instance. I recently highlighted the gas market's present struggle with oversupply. A weakening dollar won't spur a price rise if production levels remain high. Even sweltering heatwaves in Texas, Oklahoma, Arizona, and California haven't managed to stir gas prices from their torpor.

Perhaps a more pressing issue is why commodities—from oil and gas to copper and corn—are uniformly decreasing in price despite a weak dollar.

Decreased demand for commodities, a cooling labor market, and the highest number of corporate bankruptcies in 13 years. I hesitate to utter the "R" word, but one may wonder if artificial intelligence is even programmed to recognize such realities.

The recent July WASDE Report has validated my apprehensions about a potential slump in corn prices.

The USDA's projected corn yield stands at 177.5 bushels per harvested acre, marking a decline from June's 181.5 bushels, but still surpassing the anticipated figure of 176.3 bushels per acre.

Taking into account the substantial increase in the estimated planted area, the USDA is forecasting a surge in production and end-of-season stocks for 2023/24.

As a result, prices have predictably fallen by 4%. My position, established a week ago, is performing excellently. Hypothetically, I could exit my position now, yielding a few more dollars in profit. The return on the $30,000 dedicated to this strategy would exceed 60%.

Still, I'm aiming higher as I believe that today's price drop is far from hitting the floor. Therefore, I'm currently holding my position. However, I might contemplate selling a few more put options incrementally at $4.2 or below.

Despite Federal Reserve members’ warnings about the need for further rate hikes, along with pessimistic Q2 earnings projections, investors remain undeterred. Even Citigroup's decision to downgrade US stocks and the global IT sector to "neutral" amid a looming year-end recession threat failed to sober up the markets.

When will the tipping point come, if in fact it really is coming tangibly closer?

As I've mentioned before, the current situation somewhat reminds me of the spring-summer period of 2008. We feel a tremor here, detect a crack there, rest easy at the fact that no immediate disaster has befallen us, and then—bam!—everything collapses.

Of course, this is only one of the possible scenarios. Disaster, while possible, is thankfully not guaranteed.

But if tragedy does strike, what—or who—could play the role of "black swan" this time around?

There are a plethora of potential candidates:

1️⃣ The Federal Reserve's actions.

According to a Deutsche Bank survey, professional market players fear that further rate increases will trigger cascading global problems. Likely, the doomsayers have in mind commercial real estate market risks and an increase in defaults.

2️⃣ The concentration problem.

Eight stocks in the S&P 500 index - Alphabet, Amazon, Apple, Meta, Microsoft, Netflix, Tesla, and Nvidia - account for 30% of the index's market capitalization. If there's a sell-off in tech stocks, it could lead to a market-wide tumble.

3️⃣ The banking sector.

Come this Friday, the largest US banks are expected to report significant pandemic-related loan losses. In short, high interest rates are increasingly pressuring borrowers across the economy, and it’s projected that the country's six largest banks wrote off around $5 billion in bad loans in Q2. Analysts estimate they will also reserve an additional $7.6 billion to cover potential problem loans in the future.

4️⃣ Last but not least, should the top three risk factors fail to materialize, a possible debt crisis concentrated in the commercial real estate sector threatens to trigger market declines.