This is the May 2020 Monthly Recap of the Trade Spotlight: Options advisory segment.
Silver Bull Call Spread (4/29/20)
Long the December 2020 Silver 18.00 / 19.00 call spread from 18.0 points. Spread is theoretically 45.1 points. Marked-to-market gain of $1,355. HOLD.
The Silver futures price was consolidating within a large Pennant Formation. More than that, the contract was trading at the apex of the formation. Went long the market with a call spread anticipating a breakout to the upside which has occurred. The fundamentals are in line to be long. The market is approaching the target price of 19.000, if there isn’t continuation the spread may be liquidated for a profit at that time. The option expiration date is not until November 24, 2020.
Cotton Call Spread
Buy the December 2020 Cotton 59.00 / 63.00 call spread on 125 points, GTC.
No margin requirement. Option expiration is November 13, 2020.
Risk: The maximum risk is $625, plus commission and fees. A potential exit to recoup premium is a close below the recent pivot point of 55.11 (5/06/20).
Target: The profit is capped to $1,375 (difference in strike prices, minus the premium), minus commission and fees. Targeting the 63.00 potential resistance level.
There is a 1-2-3 Bottom Formation setup in the Cotton market. This is a trend reversal formation. The Trend Seeker, a GBE tool to help identify a market’s trend, is up but with a weak ranking. The MACD, a trend indicator, is flat. The Stochastic indicator, a momentum indicator, is showing a build in upside momentum. There is a seasonal to be long futures going into June.
Cocoa Call Option (3/26/20)
Liquidated the long July 2020 Cocoa 2450 call from 50 points (3/26/20 at 100 points (5/12/20) for a profit of $500.
Euro Currency Bull Call Spread (4/28/20)
Liquidated the long June 2020 Euro Currency 109.50 / 111.50 call spread from 40 points (4/28/20) at 136 points (5/29/20) for a profit of $1,200.
Sold back the long 109.50 call (64 points) at 167 points / Bought back the long 111.50 call (24 points) on 31 points.
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