This is the August 2020 Monthly Recap of the Trade Spotlight: Options advisory segment.
Open Positions
Coffee Bull Call Spread (8/18/20)
Long the December 2020 Coffee 1.300 / 1.400 call spread from 210 points. Option spread theoretical value is 3.49 points. Marked-to-market gain of $521.25.
On a pull back in the December 2020 Coffee futures market, purchased a bull call spread. The market tested the 1.3000 price level three times already and anticipated a breakout on the fourth attempt. Using a bull call spread we were able to purchase the strike price right at the target. The market did indeed break through and placed a liquidation order to take profit on the spread.
Copper Put (8/10/20)
Long the December 2020 Copper 2.500 put from 370 points. Option settled at 150 points. Marked-to-market loss of $550.
The December 2020 Copper futures market was trading sideways in July and the beginning of August. The seasonal tendency is for Copper to sell-off going into September. Purchased a put option to avoid the margin requirements and volatility of the market. A new contract high was made recently, but holding the position as the option expiration isn’t until November 24, 2020. The option is still holding value. The momentum has shifted down. Watching for a sell-off to the 2.800 price level when the put was purchased.
Working Orders
None.
Closed Positions
Silver Bull Call Spread (4/29/20)
Liquidated the long December 2020 Silver 18.00 / 19.00 call spread from 18.0 points at 56.0 points (7/14/20) for a profit of $1,900.
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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.
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