Booking Double-Digit Percentage Option Gains and Cleaning up Your Portfolio

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

With the markets entering August — one of the most difficult months of the year — the Alpha Algorithm generated no new names this week with a sufficiently high number of alpha strategies for me to make a new recommendation.

So this week, I want to highlight a couple of recommendations that relate to your existing Alpha Algorithm positions.

First, on Wednesday night, Facebook announced financial results after the market closed that crushed revenue expectations, sending the stock up 4.53% in after-hours trading. This jump will give a big boost to your FB Aug. 19 $120 calls as well.

As a general rule of thumb, anytime a stock jumps this much, this quickly, I recommend you take money off of the table if you hold the options.

With your options expiring in three weeks, and August traditionally a tough month for stocks, I am recommending that you sell all of your Facebook Aug. 19 $120 call options (FB160819C00120000) to lock in your gains. Based on my back-of-the-envelope calculations, and on the prices reported for after-hours trading, your gains should exceed 59%.

Second, your position in The Sherwin-Williams Company (SHW) has fallen out of favor among the Alpha Algorithm strategies rather suddenly, dropping from seven strategies to just three of them.

So, I am recommending that you sell your position in SHW. You should just about break even on this bet.

Third, your position in McDonald’s Corp. (MCD) had a rough week, with the stock selling off sharply. However, as of this morning, the stock is still present in eight of the Alpha Algorithm strategies I track. It is also still trading far from its $113.00 stop price. As such, it still remains in the portfolio. Note that I recommended that you sell your related options in a Special Alert sent out on Monday, July 26.

Exclusive  Betting on "Asia's Las Vegas" -- and Cashing in on Quick 53% Gains in Mongolia

Finally, you have one remaining option strategy that expires in August — the O’Reilly Automotive (ORLY) Aug. 19 $270.00 calls. I am keeping a close eye on when we can exit this position profitably, as well.

I will be back next week when I hope to provide a new Alpha Algorithm recommendation.


Nicholas Vardy

Nicholas A. Vardy

Like This Article?
Now Get Our FREE Special Report:
Alternative Investing: Investing in Timber

Stock Investor editor Paul Dykewicz reveals why investing in timber may be one of the best long-term portfolio strategies you'll find today.

Get Access to the Report, 100% FREE

previous article

U.S. stock markets closed a mixed week, with the Dow Jones down 0.46%, the S&P 500 rising 0.25% and the NASDAQ gaining 1.46%. The MCSI Emerging Markets Index ended the week up 0.70%. Big gainers in your Alpha Investor Letter portfolio included NVIDIA Corporation (NVDA), which added 5.81%, and hit a new 52-week high. In addition, the Market Vectors Biotech ETF (BBH) climbed 3.05%, the iShares Currency Hedged MSCI Germany (HEWG) ro


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details


Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details


Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details


Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details


Hilary Kramer

Hilary Kramer is an investment analyst and portfolio manager with 30 years of experience on Wall Street. Since 2010, Hilary's financial publications have provided stock analysis and investment advice to her subscribers:

Product Details


Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.