Note: Summary notes of the meeting are below the video in this article.
IG Index S&P 500 Strategy Update Stephen Cox provided an update on an IG Index trade, noting it is expected to expire worthless the following day, which is beneficial since they sold the insurance policy, expecting to profit about 2.5%. They plan to reapply the trades for the February 27th expiry, targeting a slightly higher return of over 3.5% with a 95% probability of profit, and advised attendees that no action is needed on the current trade as it will disappear on Saturday (00:02:35).
Interactive Brokers S&P 500 Strategy and TLT Trade The Interactive Brokers sister strategy, using the XSP instrument (a tenth the size of the S&P), is also up 1.29% and is expected to expire worthless, suitable for those outside the UK and Ireland for tax purposes (00:03:40). Stephen Cox also discussed the TLT trade, a longer-term play on US interest rates, where they sold a put option to insure its value at $86, noting that TLT goes up when interest rates decline and pays a 4% dividend (00:04:43).
Discussion on TLT Trade Timing and Geopolitical Risk Stephen Cox believes interest rates are more likely to decrease, supporting the TLT play, which yields 1% premium and is considered a "steady Eddie play" (00:06:51). Richard Fitzgerald inquired about entering the TLT trade now, and Stephen Cox advised them to proceed, suggesting the February 20th expiry at the $86 strike, despite the lower premium of half a percent, given the low margin requirements and sensibility of owning the stock if assigned (00:07:48). Stephen Cox recommended that exposure to TLT should be kept to less than 50% of the account size due to its lower risk profile compared to tracking a bond (00:09:26).
Introduction of the Quant AI Feature Stephen Cox introduced "Quant," their new AI feature accessible through the knowledge base, designed to answer member questions instantly and provide relevant links and screenshots to fast-track information (00:10:18). They demonstrated how it can assist with general queries, even with spelling mistakes.
SPX vs. SPY and Next S&P 500 Trade Stephen Cox clarified the difference between SPX (S&P 500 index), XSP (micro version of SPX), and SPY, explaining that XSP is cash-settled without assignment of shares, unlike SPY (00:12:12). The next trade for the US 500 challenge will target the February 27th expiry, selling the 6,500 put on SPY, which provides a 7% buffer before losses occur, resulting in a high 98% probability of profit (00:13:17).
Risk Management Strategy for S&P 500 Stephen Cox explained that in the event of a significant market downturn, like the 2% chance of a large drop, their risk management plan involves rolling out and down to a later expiry and lower strike price to bring the break-even point down significantly (00:15:21) (00:21:25). They stressed that this conservative strategy, while making less money in a bull market, offers more consistency over time (00:16:17).
Clarification on Interactive Brokers and IG Index Trade Closure Stephen Vajda questioned if Interactive Brokers requires closing contracts that expire worthless, to which Stephen Cox confirmed that no action is required unless the option is "in the money" (00:16:17). Brendan O'Reilly 262626 asked about using guaranteed stop-loss on IG index, which Stephen Cox advised against, preferring an alert system at the 6600 level to initiate the roll-out and down strategy (00:18:23). Stephen Cox generally prefers the IG index for those in the UK/Ireland and Interactive Brokers for those outside, citing the physical asset assignment benefit of SPY on IBKR, but emphasizing that taking prompt action is key in both cases (00:20:32).
Currency and Commodities Market Observations Stephen Cox noted that the Euro dollar is near 1.20, suggesting that it's a favorable time for Eurozone residents to buy US assets due to the currency exchange rate (00:21:25). They addressed an artificial drop in natural gas prices due to a contract rollover, not a market collapse (00:22:29). Regarding gold and silver, Stephen Cox noted that a weakening dollar is supporting price jumps (00:23:30).
Investment and Trading Perspectives on Gold and Silver Stephen Cox advised long-term investors holding gold to stay in the trade as long as the uptrend continues, while traders should wait for a pullback before re-entering (00:23:30). He expressed nervousness about silver's parabolic highs, suggesting investors should consider reducing holdings and that new entrants should wait for a pullback to the $100 level before buying (00:24:28).
Analysis of Meta and Microsoft Earnings Stephen Cox discussed Meta stock, which the team already owns and is up significantly following positive earnings (00:25:37). They advised current holders to continue holding, as the target price of $840 is expected to rise, but cautioned against new purchases, anticipating a potential short-term pullback due to increased AI spending (00:26:43). Microsoft, which the team does not own, saw its stock drop 8% pre-market due to market disappointment over its cloud services growth rate. Stephen Cox advised waiting to see where the stock settles, noting that the market is becoming more selective with AI stocks, but the underlying growth trajectory for Microsoft remains positive (00:28:11).
Review of Google (Alphabet) Stock Stephen Cox used Google as an example of a successful investment, currently up 120%, with no intention of selling, as the analyst target price continues to increase from $220 to $348, reflecting the uptake in Gemini and cloud services (00:30:18). They contrasted Google's intact uptrend with Microsoft's lower-lows trend, emphasizing the need to wait for the downtrend to end before investing in Microsoft (00:31:32).
Amazon Stock Discussion Richard Fitzgerald asked for Stephen Cox's opinion on Amazon, noting the potential for a triple top formation on the chart (00:31:32). Stephen Cox stated that while fundamentals show about 25% upside, they are concerned by the stock's struggle to take out its previous high and recommended waiting until after the upcoming earnings report before taking a position (00:32:28).
Current Stock Watchlist: Dell, Oracle, and Carnival Corporation (CCL) Stephen Cox highlighted Dell, Oracle, and Carnival Corporation as stocks of interest. Dell is nearing a potential buy after a sustained downtrend and consolidation, driven by high demand for AI servers offset by rising raw material costs, but Stephen Cox wants confirmation the downtrend is over (00:34:24) (00:36:19). They are also interested in Oracle, waiting for its downtrend to end (00:36:19). Carnival Corporation is favored based on the expected benefit from the high wealth of middle to higher-income and retired Americans (00:37:26). PayPal and CRM (Salesforce) are being avoided for now due to new lows and market skepticism regarding their AI products, respectively (00:36:19) (00:38:32).
Discussion on Cotera Energy and Market Outlook Brendan O'Reilly 262626 asked if it's time to sell Cotera Energy, and Stephen Cox advised taking the profit, noting the stock's notorious volatility, despite favorable conditions with rising oil and natural gas prices (00:38:32). Stephen Cox summarized that the S&P 500 short put strategy should be the majority of trading, and TLT options are a good play (00:41:31). They project a possible 5–10% shakeout in the stock market in the first three to six months of the year, which should be viewed as a buying opportunity, expecting the S&P 500 to reach 8,000 by year-end due to AI efficiencies and a broader rally (00:42:33).
Copper Market Analysis Tom Walker requested an analysis of copper, which has recently jumped. Stephen Cox linked copper demand to renewable energy expansion and data center needs, noting recent consolidation has broken out to a new high (00:44:44). He advised traders to take profits now and wait for a pullback, emphasizing that copper prices are also correlated with the US dollar's value—a weakening dollar drives copper prices up (00:47:01). They warned that these metals can sell off aggressively and require a high nerve to trade, unlike the S&P 500 short put strategy (00:50:00).
Final Remarks and Quant Tool Reminder Stephen Cox concluded the meeting by reminding attendees to use the new Quant AI tool for instant answers, and if Quant cannot assist, to request an agent for further support (00:50:00).
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