This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Options, published on Tuesday, June 21, 2016.
There is a trade opportunity based on a potential Momentum Entry Technique breakout in the Soybean Meal market. The MACD and Stochastic indicators have hooked bearish. Trend Seeker is still up, but with a weak ranking. Anticipating a change of the Trend Seeker on the breakout. With increased volatility and the potential risk of the stop loss placement if trading futures, turning to the options market to trade this opportunity.
Purchase the September 2016 Soybean Meal 380/350 call spread for 8.00 points or $800, GTC.
Target is the 350.0 price level; near the 50% Fibonacci retracement of the Spring rally.
Risk: $800, plus commission and fees
Reward: $2,200 (380-350 x $100 – cost of the spread or $800), minus commission and fees.
No margin requirement. Expiration date is August 26, 2016 (66 days).
September 2016 Soybean Meal Chart
Contact your Daniels Trading broker by phone or email to place this trade.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.