This is the September 2020 Monthly Recap of the Trade Spotlight: Options advisory segment.
Open Positions
Coffee Bull Call Spread (9/2420)
Long the March 2021 Coffee 1.3000 / 1.4000 call from 150 points. Option spread settled at 138 points. Marked-to-market loss of $45. ADD.
Bought the 1.3000 call on 507 points / Sold the 1.4000 call at 357 points.
Liquidated the previous Coffee bull call spread position for a profit. Then the Coffee futures market went into a free fall for eight straight sessions trading down to a potential strong support level near 1.1000. The Stochastic indicator showed momentum in the “oversold” territory and easing up. Entered into another bull call position at that time. The contract recently tested the support level after entering into the position once more, but the level held. Risking the full premium. The option expiration date is not until February 10, 2021.
Copper Put (8/10/20)
Long the December 2020 Copper 2.500 put from 370 points. Option settled at 10 points. Marked-to-market loss of $900. HOLD.
The December 2020 Copper futures market was trading sideways in July and the beginning of August when a put option was purchased following the seasonal tendencies. More sideways trading occurred since the position was entered, albeit with higher highs.. Recently the volatility has picked up in this market. Risking the full premium at this point. The option expiration is November 24, 2020.
Crude Oil Put Spread (9/04/20)
Long the January 2021 Crude Oil 38.00 / 35.00 put spread from 65 points. Spread settled at 112 points. Marked-to-market profit of $470. LIQUIDATE.
Purchased the 38.00 put on 180 points / sold the 35.00 put at 115 points.
The 38.00 price level was tested a second time and broke through. The downside target is the 50% Fibonacci Retracement of the summer rally at 35.44. Watch for a liquidation order soon whether the target is triggered or the downside momentum halts first. The option expiration date is December 16.
Working Orders
None.
Closed Positions
Coffee Bull Call Spread (8/18/20)
Liquidated the long December 2020 Coffee 1.300 / 1.400 call spread from 210 points (8/18/20) at 350 points (9.01.20) for a profit of $525.
Sold back the long 1.300 call (584 points) at 1047 points / Bought back the short 1.400 call (274 points) on 697 points.
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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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