Cash is a Position

March 23, 2020

If you’re worried, scared, uncertain, unhappy, on tilt — or all of the above, depending on the hour — it’s ok to do nothing.

Cash is a position.

Cash is comfort. Cash is control. Cash is Safety.

It can be very tempting to go in and try to sell all the premium you can here and hold on for dear life knowing the “odds are in your favor” (And they are…). But that doesn’t mean it’ll be easy. No way.

Short premium plays, while statistically are in our favor here, may be some of the toughest holds in this environment.

When faced with this situation, there is no shame in taking your ball and going home. Capital preservation is Job #1. If you don’t feel confident enough to put on trades and stick to your plan, come what may, then the best move is to do nothing.

The Market will be here for you when you’re ready to wade back in.

The real heroes are on the front lines in hospitals right now. They aren’t the keyboard cowboys making trades in the stock market.

Be smart. Be patient. Be focused. And if you’re not feeling it — don’t trade.

For those of you willing to step into the fray. Stick with the names with the most volume. Volume equals liquidity. Stick with the biggest namebrand stocks and the most liquid index and sector ETFs. Keep it simple. Define your risk. And be short premium.

We’ll get to the other side.

~ @chicagosean