This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Options, published on Tuesday, August 07, 2018.
Orange Juice Put Option
The Orange Juice contract broke a lower trend line today. The Trend Seeker is neutral, but with a bearish ranking. The MACD indicator, a trend indicator, has already turned bearish. The Stochastic indicator shows strong momentum to the downside. Already holding a put option position in August at the same strike, though it is set to expire in ten days on the 17th. Adding another OJ put option on this breakout with additional time until option expiration.shift to the downside. The one caveat is the upcoming “hurricane season” can have profound effects on the physical crop. Trading this opportunity as the September 2018 contract broke a key pivot point three sessions ago using an option contract to reduce the risk to just the premium paid and avoid the use of stop losses.
Buy the November 2018 OJ 150.00 put on 150 points ($225) or better, GTC.
No margin requirement. Delta is .1536. Expiration is October 19, 2018.
Maximum Risk: Risking the full amount of $225, not including commissions & fees.
Maximum Profit: Unlimited, not including commissions and fees.
November 2018 OJ Chart from Bar Chart
Contact your Daniels Trading broker by phone or email to place this trade.
Risk Disclosure
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.
ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADE PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF THE HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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