This is the October 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 70 points. Marked-to-market loss of $300. ADD.
Bought the 1.3000 call on 507 points / Sold the 1.4000 call at 357 points.
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, after previously liquidating a bull spread position for a profit. The contract recently broke the support level, but trading sideways. 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 a mid-October rally setting up a new twelve-month contract high. Risking the full premium at this point. The option expiration is November 24, 2020.
Working Orders
None.
Closed Positions
E-mini S&P Put Spread (10/16/20)
Liquidated the long December 2021 E-mini S&P 3280 / 3200 put spread from 15.0 points at 30.0 points (10/28/20) for a profit of $750.
Liquidated the 3280 put at 162.0 points / liquidated the 3200 put on 132 points.
Crude Oil Put Spread (9/04/20)
Liquidated the long January 2021 Crude Oil 38.00 / 35.00 put spread from 65 points at 136 points (10/29/20) for a profit of $710.
Sold the long 38.00 put (180 points) back at 425 points / Bought the short 35.00 put (115 points) back at 289 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.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
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