This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Options, published on Wednesday, December 21, 2016.
Bull Call Spread
There is a trading opportunity in the Coffee market as the March 2016 futures contract found support near the 140 price level. The MACD, a trend indicator, and the Stochastics, a momentum indicator, have hooked bullish. With potential volatility and relatively expensive futures margin requirements, let’s look to the options market to establish a bullish position and reduce risk. Trend Seeker is down, but with a weak ranking. Anticipating the change to Trend Seeker on a breakout of the recent highs. There is also a seasonal trade to the upside in Coffee starting tomorrow.
Purchase the March 2017 150/160 call spread for 200 points or $750, GTC
Risk: Maximum Risk: $750 (not including commissions & fees)
Reward: Maximum Profit: $3,000 (150.00-160.00 x $375 per point and minus the cost of the spread)
Maximum Profit: $3,000 (150.00-160.00 x $375 per point and minus the cost of the spread)
March 2017 Coffee Chart
Contact your Daniels Trading broker by phone or email to place this trade.
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