Ultimate Income Earned $1,577 of Income Last Month During a Rare "5% February"
The S&P 500 surged higher again last month, notching a rare 5%+ February gain, despite how overbought the stock market already was, which I've pointed out so far in vain.
But at the same time, I noticed subtle leadership shifts beneath the surface of the market. And that's good news for more market gains to come.
The S&P 500 finished February with a gain of more than 5% for only the 11th time in the past 96 years, as you can see in the table below.
The 10 prior 5% Februarys were followed by mixed results in March, with the S&P down 1.87% on average. The good news is that after the pullback, stocks usually got right back on track. The S&P was up 80% of the time over the rest of the year.
That's pretty much the pattern I still expect to play out: rising volatility early in 2024, which is typical for an election year, followed by a stronger second-half finish. Over the first two months of 2024, the volatility has been to the upside – but stay tuned.
As for your Ultimate Income portfolio, you should have been fully filled on all trades this week. This included rolling your Mattel (MAT) and ProShares Ultra Semiconductor (USD) put options and your Occidental Petroleum (OXY) call options...closing out your Cisco Systems (CSCO) covered call... and selling new cash-covered puts on Charles Schwab (SCHW) and Coterra Energy (CTRA). A busy week.
Altogether, you should have earned $210 of instant income for each option contract traded. A profitable way to end a good money-making month.
For the entire month of February, you should have banked $1,577 of option income plus traditional dividends. That's a tad better than the $1,089 we earned in January even though February had less trading days. Nicely done!
So, with just two months in the books, our total income earnings of $2,666 already this year puts us on pace to beat 2023's total of $9,402!
And since we launched this strategy in 2022, members have now earned a grand total of $17,377 in cash income. That's fantastic, and it's a big reason why we have the proven ability to make money consistently no matter if the stock market moves up, down or sideways.
This week our Nike (NKE) Mar 1, 2024 $96 put option will expire far out of the money at the close today. No action required.
And next week I already have several trades on the launchpad ready to go when the timing is right. Plus, we have 11 call and put options due to expire over the next two weeks.
So, plenty of money-making opportunities coming soon, starting Monday.
Good investing,
Mike Burnick Senior Analyst, Ultimate Income
P.S. If you have any questions or concerns, please reach out to me at emailmikeburnick@tradesmith.com and include "Ultimate Income" in the subject line.
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