Stocks edged higher ahead of stimulus update

e-trade ^ | 20/10/20

[Eleutheria5]

4:20 PM ET 10/20/20 | Briefing.com

The S&P 500 gained 0.5% on Tuesday, although it was up as much as 1.5% ahead of a stimulus meeting between House Speaker Pelosi and Treasury Secretary Mnuchin. The Nasdaq Composite increased 0.3%, the Dow Jones Industrial Average increased 0.4%, and the Russell 2000 increased 0.3%.

Yesterday reports suggested a stimulus deal wasn't looking imminent, but comments from the House Speaker after Monday's close provided the market hope that both sides would get something done soon. Senate Majority Leader McConnell said he would bring a presidentially supported bill to the floor if it passes the House but reportedly wants a deal after the election.

Ms. Pelosi and Mr. Mnuchin were still negotiating at market's close, which may have caused some hedging activity for any disappointment. Nevertheless, ten of the 11 S&P 500 sectors still closed higher, led by the energy (+1.2%), financials (+0.8%), and communication services (+0.8%) sectors, while the consumer staples sector (-0.1%) closed lower.

.....

[Gator113]

;>)

[Gator113]

Agreed.

[Crucial]

I wish I knew how to do what you are describing. I assume you’re selling puts but how do you know which one what expiration date to choose?

[languishi]

The only way to make money in the market over any meaningful time is to use the gordon grown formula with dividends.

[Eleutheria5]

You mean, reinvesting dividends? I’m doing that too.

[Eleutheria5]

Selling calls two steps out of the money and at or above the purchase price of the stock, with the expiration date that gives me the largest premium. I may have to wait months, or until a slump in the market, but I also have another escape hatch in the off chance that the option gets in the money and is exercised, that I make a limited, but decent profit in that case.

[Crucial]

Thanks for the explanation.