This is the March 2020 Monthly Recap of the Trade Spotlight: Options advisory segment.
Open Positions
Cocoa Call Option
Long the July 2020 Cocoa 2450 call from 50 points or $500 (3/26/20). Option settled at 56 points. Marked-to-market profit of $560. ADD.
On a Double Bottom Formation setup purchased a call option in the Cocoa market. Since entering the position the July 2020 contract has traded sideways. The trend is near shifting to an uptrend. The momentum is already up. Anticipating a breakout and a shift in trend if futures trades above 2300, a potential resistance level. The upside target is the 50% Fibonacci Retracement of the massive sell-off during the Coronavirus pandemic (2570). The price alert to liquidate the position is if the contract closes below the twelve-month contract low (2201). Option expiration is June 5, 2020.
Silver Bull Call Spread
Long the May 2020 Silver 19.00 / 19.50 call spread from 10.0 points (2/19/20). Spread settled at 2.9 points. Marked-to-market loss of $355. HOLD.
The May 2020 Silver futures contract traded above the 19.000 price level just five days into entering the position. The target is the twelve-month contract high of 19.940 (9/4/19). The Silver market joined the rest of the commodities however in a tremendous sell-off due to the Coronavirus pandemic. Traditionally in times of distress, capital tends to flows into the physical, futures, and commodity option metal markets. The position was held for that reason. The price alert was triggered, but the value of the spread evaporated. Silver futures are now rallying though the issue with the position may be time, option expiration is April 27, 2020.
Closed Positions
None.
Try Trade Spotlight Suite – for 3 Months
Trade Spotlight Suite – Trial - The Trade Spotlight advisory service consists of three segments covering futures, futures spreads, and commodity options. At the end of each trading day the commodity markets are analyzed by applying our methodology and recommendations are delivered to you based on our trading philosophy. Our technique is to track specific chart patterns for breakouts and apply key technical indicators to confirm the trade setup.
Risk Disclosure
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.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
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 third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
