My investment portfolio closed today’s session with a small capital loss of -$238.48. My non-registered portfolio closed at $199,547.23, my U.S. portfolio at $5,582.90 U.S., my RRSP stocks-only portfolio at $109,139.72, and my TFSA portfolio at $184,002.68. My stock portfolio alone is now worth more than $500,000. Despite today’s small loss, the numbers are still looking great.
Unless you have been living under a rock, you are probably aware that Space Exploration Technologies Corp. (SPCX) recently went public on the Nasdaq. The main person behind SPCX is, of course, Elon Musk, who owns more than 80% of the voting control.
I have to say it: I do not personally have much confidence in Elon Musk. There was just no way I was going to even consider owning shares of Space Exploration Technologies Corp. (SPCX) as a long-term investment inside my very beautiful portfolio.
But what about a quick hit-and-run for trading purposes like I used to do in the good old days?
Why not? And of course, I did :-)
I haven’t invested in any stock, ETF, or any other type of unit strictly for trading purposes in a very long time. I did trade a bit in the past, but it has been quite a while.
In my opinion, because SPCX is brand new on the stock market and has attracted so much attention, it can be an interesting candidate for day trading, especially in these early days of trading. It has been reported that SpaceX raised about US$75 billion in its IPO. A lot of money has already been invested in SPCX, and the stock continues to attract a huge amount of attention every single trading day. We are still in the early days of SPCX.
That makes SPCX an interesting candidate for day trading, but let’s be clear: there is also a lot of risk involved.
For Canadians, it is not especially easy to day trade Space Exploration Technologies Corp. (SPCX) directly, for several reasons. SPCX trades in U.S. dollars, its value is currently around the US$200 mark, and that is not cheap for Canadian investors. You need to invest quite a lot of money if you want to make a meaningful profit from small price movements.
But there is another way to get exposure to SpaceX: the Harvest SpaceX Enhanced High Income Shares ETF (SPXE).
SPXE is an ETF that trades in Canadian dollars, and its price per unit is much lower than SPCX. Its value is directly linked to SpaceX, which makes it a more accessible way for Canadian investors to play around with the SpaceX excitement, at least for trading purposes.
Today, before and at the market opening, I was watching the value of Space Exploration Technologies Corp. (SPCX) very closely. With SPCX, you can follow both the regular trading price and the after-hours price. When preparing a day trade, watching how SPCX behaves after hours can give you a little indication of what might happen the next morning. If the stock is strong after hours, it may be a sign that there could be some momentum at the opening.
Personally, I would not invest directly in Space Exploration Technologies Corp. (SPCX). For my own little trading experiment, I preferred using the Harvest SpaceX Enhanced High Income Shares ETF (SPXE) instead.
And remember: my goal here was not to invest for the long term into SpaceX. The goal was to perform a quick hit-and-run: get in, make a small profit, and get the hell out!
And today, I was able to do exactly that.
Since I haven’t done any active trading in quite some time, I decided to take it slow. I invested in 100 units of SPXE. I made my move at exactly 9:33 a.m. this morning, buying my SPXE units at $16.06.
I didn’t hold them for very long, and I didn’t want to. I had placed this trade inside my non-registered portfolio, using my margin account. That made me even more motivated to get in and out quickly.
If you decide to perform day trading, I personally think the simplest way to do it is inside a non-registered account. If you perform frequent buying and selling operations inside your RRSP or TFSA, the Canadian taxman could eventually get back to you, and those operations could create tax complications. Small operations may go under the radar, but personally, I prefer to play it safe and day trade outside my registered accounts, just to keep things simple and avoid unwanted surprises.
I performed my sell move on the Harvest SpaceX Enhanced High Income Shares ETF (SPXE) at exactly 9:51 a.m., selling at $17.08.
And that is how I made a quick little $102 in less than one hour.
Today, SPXE closed the trading day at $15.70 per unit. So I believe I did a good job selling at $17.08. During the day, SPXE traded between $15.07 and $17.91. That gives you a pretty good idea of the type of volatility involved, which is exactly what you need in order to quickly sell at profit.
When I day trade, I don’t usually work with automatic buy or sell orders. I simply go with the impulse of the moment and hope for the best. That’s really it! And while I am inside a trade, I stay very close to it. I refresh, refresh, refresh, and I sell whenever I feel it is the right time for me.
When I noticed that SPXE was trading around the $17 mark, I decided that it was my time to get out.
When I day trade, my mentality is simple: get out of there alive without losing any money.
Anyway, this was quite fun!
Space Exploration Technologies Corp. (SPCX) closed today’s trading session at $201.80, up $9.30. Currently, SPCX is trading at $203.85 during after-hours trading. The difference between the regular closing price and the after-hours price is not huge. This could mean that the gains are beginning to slow down for SPCX, which could make it harder to day trade SPXE tomorrow morning.
In my opinion, the market opening is the best time to perform this kind of day trade. Based on how things are looking right now, I probably won’t be day trading SPXE tomorrow morning.
Whatever you decide to do, here are my best little tips:
Day trading comes with risk. I would suggest investing only an amount that you feel comfortable losing.
It is easy to buy, but selling at a profit does not always go according to plan. You may not be able to sell at a profit on the same day. You need to accept this idea.
If you can trade with your own money instead of using margin money, that is even better.
And finally, remember that this is not financial advice. I am simply sharing my own little trading adventure, like I had been doing for the past 20 years.
On those good words: happy trading!
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