| Are you a new member? | | 1. | Read our Blueprint for Options Success here | | 2. | Learn to trade Short Puts and Covered Calls | | 3. | Watch our most recent Live Webinar here | | 4. | Watch our New Member Webinars here and here | Dear Savio, We are always looking for confirmation of trader sentiment on Wall Street. If we can confirm traders are bullish, we feel more confident in our bullish outlook. On the other hand, if it looks like traders are becoming increasingly bearish, we feel more confident in our bearish outlook. After all, traders drive prices... One of our favorite ways to see just how bullish traders are is to look at how much money traders are borrowing to buy the stocks they are trading. Margin Debt Traders can borrow up to 50% of the purchase price of a stock – according to Regulation T of the Federal Reserve Board. That means if a stock costs $100, you only have to use $50 of your own money to purchase the stock. You can borrow the other $50. Borrowing money to buy stocks is referred to as "buying on margin," and the amount of money you have borrowed to buy stock is called "margin debt." Tracking the total amount of margin debt being used to buy stocks can give you a good sense of how confident traders are. This is because confident traders tend to borrow more. Nervous traders tend to borrow less. Before this past year, the highest level of margin debt Wall Street had ever seen was $668,940,000,000 in May 2018, according to the Financial Industry Regulatory Authority (FINRA). That is a ton of money. By the height of the coronavirus pandemic, however, margin debt had plunged back down to $479,291,000,000 in March 2020 as traders looked to reduce the amount of risk they had taken on in their portfolios. It's easy to understand why the S&P 500 dropped into a bear market in early 2020 when you see that hundreds of billions of dollars evaporated from the stock market. So what has happened since then? Have traders kept their risk levels low? Have they been cautiously waiting to see if the market was going to bounce back? Ha! No, they have not. In fact, it has been quite the opposite. Instead of cautiously dipping their toes back into a bullish uptrend, traders have been on the largest borrowing spree of all time. As of February 2021, traders have borrowed a total of $813,680,000,000 to buy stocks. 
Fig. 1 -- Margin Debt Levels -- Chart Source: FINRA) Yes, you are seeing that right. In less than a year, Wall Street has borrowed an additional $334,389,000,000 to buy stocks ($813,680,000,000 - $479,291,000,000 = $334,389,000,000). In other words, traders are incredibly bullish on the stock market right now, and they are putting their own money – plus a mountain of borrowed money – where their mouths are. Now, it is important to note here that FINRA releases its margin debt data a month after the fact. That's why we are just now seeing the data for February. We'll have to wait until the last week in April to know what the March numbers look like, but we expect to see the current trend continue. The Bottom Line Seeing traders load up on so much margin debt gives us confidence that the current bullish uptrend still has legs. It has some built-in risk as well with that amount of debt, which could lead to faster selloffs when they eventually come. But for now, we like what we are seeing. Plus, the S&P 500 is on the cusp of breaking above the 4,000 level. With all the talk of the Biden administration pushing for trillions of dollars of additional spending, we wouldn't be surprised to see it happen before Wall Street takes Good Friday off for the coming Easter weekend. Strategic Trades Review We’ve redesigned our Strategic Trader Portfolio! You can now quickly and easily view the long-term history of the positions we’re trading around. Just click the Show All button under any open position to show its past trades. We’ll be updating this portfolio and making improvements over time. Let us know what you want to see by emailing us at Feedback@InvestorPlace.com. We’ll be discussing each of our current trades in tonight’s live Strategic Trader webinar. Click here to reserve your spot now! If you're new to options trading -- or if you'd like a quick refresher course on a specific aspect of options trading -- please visit our Education Center.
We've created a large archive of high-quality instructional videos. And if you haven't checked it out yet, we also have a series of options selling courses in our Course Library.
We're confident they'll help you become a much better options trader, no matter what level you're at now. | Open Positions These are the Strategic Trader positions that are currently open and active (Charts courtesy of TradingView). 
Bank of America (BAC) – On March 26, we recommended you "sell to open" the BAC April 16th $36 Put Write for $0.36 or more. BAC is hitting resistance around $39, but the current consolidation range is still well above our strike price. We expect the stock to remain elevated as Treasury yields rise. If you have not already established a position in BAC (or are working on scaling into a position), and the option is trading at or above our recommended minimum price, we still recommend entering this trade. 
Coca-Cola (KO) – On March 24, we recommended you "sell to open" the KO April 23rd $50 Put Write for $0.58 or more. KO is pulling back from its recent high just below $54, but we are confident the support level at $51.50 will hold – keeping the stock well above our strike price at $50. If you have not already established a position in KO (or are working on scaling into a position), and the option is trading at or above our recommended minimum price, we still recommend entering this trade. 
Nike (NKE) – On March 22, we recommended you "sell to open" the NKE April 16th $130 Put Write for $1.15 or more. NKE briefly dropped below our strike price before rebounding the next day. The stock is currently regrouping, but we expect it will be above our strike price at expiration. If you have not already established a position in NKE (or are working on scaling into a position), and the option is trading at or above our recommended minimum price, we still recommend entering this trade. 
Chegg (CHGG) – On March 19, we recommended you take possession of CHGG common stock at $100.00 per share when our CHGG March 19th $100 Put Write expired in the money. CHGG is bouncing back up from support just above $80. As the stock moves higher, it will give us another opportunity to sell another covered call against the stock when the call premiums are worth more. If you have not already established a position in CHGG (or are working on scaling into a position), we recommend waiting to enter this trade. 
Take Two Interactive (TTWO) – On March 12, we recommended you take possession of TTWO common stock at $197.50 per share when our TTWO March 12th $197.50 Put Write expired in the money. On March 16, we recommended you "sell to open" the TTWO April 16th $195 Covered Call for $1.10 or more. TTWO has climbed back up to its down-trending resistance level just below $180. We are watching to see if the stock is going to have enough bullish momentum to break above resistance or if it is going to consolidate below this level before rallying again. If you have not already established a position in TTWO (or are working on scaling into a position), we recommend waiting to enter the long stock position. However, if you currently own the stock, we still recommend opening the covered call position. 
Walt Disney (DIS) – On March 11, we recommended you "sell to open" the DIS April 9th $195 Put Write for $6.00 or more. DIS has found support just below $182 (the same level that served as resistance at the beginning of the year). We are looking for the stock to bounce up from this level and move back toward our strike price. It may not fully recover before expiration, but we'll be happy to have the stock put to us so we can start selling covered calls against the shares. If you have not already established a position in DIS (or are working on scaling into a position), and the option is trading at or above our recommended minimum price, we still recommend entering this trade. 
Target (TGT) – On March 5, we recommended you take possession of TGT common stock at $185.00 per share when our TGT March 5th $185 Put Write expired in the money. On March 9, we recommended you "sell to open" the TGT April 16th $185 Covered Call for $3.40 or more. TGT has smashed through down-trending resistance at $190 and is now trading well above our strike price. We expect our shares will be called away from us at expiration. If you have not already established a position in TGT (or are working on scaling into a position), we recommend waiting to enter the long stock position. However, if you currently own the stock, we still recommend opening the covered call position. 
Microsoft (MSFT) – On March 5, we recommended you take possession of MSFT common stock at $240.00 per share when our MSFT March 5th $240 Put Write expired in the money. On March 9, we recommended you "sell to open" the MSFT April 16th $240 Covered Call for $4.80 or more. MSFT is consolidating in a tighter and tighter range below resistance at $238. We anticipate the stock will break above this level in the coming weeks. If you have not already established a position in MSFT (or are working on scaling into a position), we recommend waiting to enter the long stock position. However, if you currently own the stock, we still recommend opening the covered call position. Closed Positions Starbucks (SBUX) – On March 31, we recommended you buy to close the SBUX April 16th $105 Put Write. The position was closed for a return on margin of 5.1%. Chegg (CHGG) – On March 30, we recommended you buy to close the CHGG April 16th $100 Covered Call. The position was closed for a return on invested capital of 0.8%. United Parcel Service (UPS) – On March 29, we recommended you buy to close the UPS April 16th $155 Put Write. The position was closed for a return on margin of 6.6%. Webinar Preview Join us TONIGHT at 8 p.m. ET for a Live Webinar! During tonight’s live webinar, we’ll review the weekly newsletter, discuss coming events in more detail and walk through our top trades. We also encourage you to submit your questions live during the session. We want to do everything we can to help you become a successful options trader, which is why you’ll have live access to us for an hour every week. And if you have any questions or comments you would like to send us in advance of the live session -- or anytime during the week -- you can write to us at Feedback@InvestorPlace.com. If you can't attend the session live, you can watch the archived version on our website in the Webinars section. It'll typically be posted within about two hours of the end of the live session. Sincerely, 
John Jagerson and Wade Hansen
Editors, Strategic Trader | 
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