6/19 – Teetering

Which way will it go? The market has slowed in Volatile action of the past few weeks. It is trending slightly lower. My impression is that we are consolidating after the big gains of the past week. This seems to be slightly bullish.


Which way will it go? The market has slowed in Volatile action of the past few weeks. It is trending slightly lower. My impression is that we are consolidating after the big gains of the past week. This seems to be slightly bullish.
I exited 2/3 of my STLD position with a nice 50% profit after two weeks. This leaves the remainer of the position on with very little risk. There is still much profit potential for the remaining trade (Still a 2:1 Reward/risk ratio). The chart does not look ripe for a consolidation (traditional Calendar spread).
COGN – has earnings on Thursday afternoon. I would like to take my remaining position off before earnings. The underlying is down this morning.
CREE – I like my position here. Good profit zone between 24-31.
I haven’t found any calendar trades which meet my criteria this morning.
I am watching the price action of BTU. I am looking at a bullish butterfly, and a bear put spread.
I put on a 1 unit BEAS 12.5 p Aug/Sept calendar for .05. Not much premium to work with in this one.
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2 thoughts on “6/19 – Teetering”

  1. hi jonathan, i am trying to learn from your posts. i would like to follow your trades, but do not understand what options you are buying & selling. can you spell them out once in a while.
    “I am watching the price action of BTU. I am looking at a bullish butterfly, and a bear put spread.”
    – why would the trades be bullish & bearish at the same time
    – will it be both or either / or
    thx
    rl

  2. rl,
    thanks for the email. BTU is Peabody energy. The best way to find the company name is enter the symbol in on bloomberg.com or cnbc.com. It’s funny, being a technicial I prefer to not know what the company does. However, I do want to know if Volatilty is high due to Earnings, takeover, etc. But other than that, putting too much emotion (what I think/feel) into the trade seems to goof me up.
    This combo trade is a variation on a strangle. I will post the specific trade when I get it filled. But to answer your question. I am setting this trade up to be be bullish and bearish (non-directional) at the same time. Sept bearish vertical, and Aug bullish butterfly. With the right reward to risk, this can make sense to set up the hedge. And yes one of these will probably be a loser, my intention is to make more on my winning trade than I lose on my loser.
    Also, here is some of the short hand I am using “25p Jul/Aug Calendar” is selling 25 July put, and buying 25 Aug put for the same amount of options.
    “55c/60c/65c Aug Butterfly” is buying 1x 55 August calls, selling 2x 60 calls, buying 1x 65 calls.

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