Options adjustment:

Today is the close of the May options, I am “rolling” the contract into June and selling the ES Jun 1230 puts for 12 pts. The term rolling is simply having basically the same position yet with a different month option.

So the position we are in now is short Jun 1230 puts and short Jun 1340 calls.

As mentioned at the outset of the blog, expect two of these months every year with a net loss, it is just a matter of course over time, we are still well ahead of our goal for the year, in fact tracking over 30% even considering the loss.

Our May trade is the first net loser we have had, we gained 6.5 pts on the initial sale, and then sold a Jun contract that netted out 14pts yet we had to pay 29 pts to cover our short trades.  The loss is 8.5 pts which is just over 4% per $10,000.

Since the Jun call was already sold and partially used to cover our loss, we are counting that as being worth 10 pts in our Jun trade.  So our position is short ES Jun 1230 puts and 1330 calls and the combined value for them is 22 pts.

 

 

Interesting side note:

The interest rate that Greece is currently being charged in order to borrow new money is over 28%!!!

To put that into perspective, if you were to finance a home with a $200,000 mortgage your monthly payment would be $4900 per month!!!  Your total amount paid over 30 years would approach $2,000,000!!!

 

 

Adjustment to May trade:

The market was up this morning delaying any need for adjustment.  However, with the news on Greek debt the market became shaky, there is also news on “whale” trader for JPM that is causing concern.

All of this is in the bigger scheme causing little bigger concern, yet we want to protect our interests and be proactive in the face of this.

Rather than going with the next month for our May put position, I am simply selling a June call near the market.  Covering the May call for .05 and selling the June 1340 call for 24 pts.  This will give us good protection as we wait for our May put option to close Friday this week.

This is the most interesting trade since the blog started, follow along closely, with time it will work out well!!!

 

 

Adjustment to May trade:

The market was up this morning delaying any need for adjustment.  However, with the news on Greek debt the market became shaky, there is also news on “whale” trader for JPM that is causing concern.

All of this is in the bigger scheme causing little bigger concern, yet we want to protect our interests and be proactive in the face of this.

Rather than going with the next month for our May put position, I am simply selling a June call near the market.  Covering the May call for .05 and selling the June 1340 call for 24 pts.  This will give us good protection as we wait for our May put option to close Friday this week.

This is the most interesting trade since the blog started, follow along closely, with time it will work out well!!!

 

 

Adjustment:

The market is on a consistent downtrend and is making an adjustment to our May trade advisable.

I will wait for the market to open tomorrow morning for this adjustment for certainty.

This will simply involve moving into the June contract at a lower strike price for both puts and calls.

This will happen usually 2 times per year and is to be expected on occasion with the program.

thank you!!!

 

 

 

 

May ES Options trade:

Selling the May ES option spread, the 1440 calls v. the 1330 puts for total of 6.5 pts.

Covering April ES option trade

Covering both sides of April ES options trade for total of 3.25 pts.  3pts for the put and .25 for the call.

This makes for a very nice trade for the month and keeps us on schedule for nicely exceeding our goals!

I will look for technical and time reasons for the May trade and post at the appropriate time soon.

 

 

April ES short options trade:

The market is continuing it’s upward trend and does present some extra risk for a “neutral” trade at this point but the time is right as can be to put this trade on.  I am selling the April 1435 call and the April 1335 put for a combined total of 8.5 points, this represents a premium paid of $425 dollars on every $10k in your account.

The contract has a full three weeks until expiration and we will look to take this trade off as soon as possible while gaining as much as we can.  Time decay should be at it’s maximum over the next two weeks even if we get some pressure on this trade it should be well within risk controls.

 

Patience!!!

Patience is required at times, the ES market is trending up and the best time to be in market neutral short options is when the market is just that “neutral”!

The markets in general seem willing to be taking on risk, the oil markets are also trending up, this means overall confidence is high so despite many potential problems around the world for the most part they are being ignored.  There is still plenty of time to get our April ES trade on!

 

Closing March ES options trade

Closing the March 12 options trade today.  With the back off in the market today it is a good time to close our March trade at 2.75 pts for a total profit on the month of 5.5 pts which is 2.75% on the month, this makes another month without loss in our record and only adds to the overall higher than goal results!!!