It’s February options expiry today and I have about $140k in assignments which will get added to another $100k I have on the sidelines. Managing cash is starting to be a real problem. Just sitting in cash generates even more income in the form of interest but for me that’s a better option than this over valued market that is experiencing growing volatility.
Even my new AI trading tools are giving me subtle warning signs that things are not all ok with this market. Perhaps I’m being overly cautious but I’d rather be cautious than poor.
Here’s what I am seeing that is concerning me:
- Gold call options toward the end of the year are showing juicy premiums, this means gold may shoot higher and likely to have higher volatility.
- Silver call options are the same. Silver may explode higher but so will volatility.
- Oil themed ETFs are paying juicy premiums. Oil has been fairly flat for a while now, even dipping to low, but relatively flat but I’m now seeing money flows into oil firms and ETFs.
- TLT is starting to climb in value. This ETF tracks the 20 year Treasury bond and inflows into this ETF means people are seeking security over returns.
- Tech sells off, rallies a bit, then seems to sell off some more, this is not good, it is an indication of serious repricing or price discovery going on. I get it, AI has the potential to end a whole bunch of companies over the long terms so the market needs to discover who will survive and who won’t.
- NVIDIA earnings out next week and if the numbers aren’t great there may be a ton of volatility or even market correction.
Then there are all the other issues: erratic trade policy, erratic foreign policy, erratic decisions, etc. with this administration that doesn’t bode well for investors.
I don’t know what 2026 has in store but I don’t like what I’m seeing. I will continue to use AI strategically to position my portfolio. I’m sticking largely with collars and strategic covered calls for now.
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Are you hedging or moving to cash?