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Home / Futures Blog / Recap Of the February “Data Feed Trade”

Recap Of the February “Data Feed Trade”

February 22, 2022 by Don DeBartolo

Here is a recap of the “Data Feed Trade” from February 2022.

The “Data Feed Trade” is a strategy to collect premium once a month to offset your monthly exchange data fees. You can read all of the details of this strategy in the following article: Paying Exchange Market Data Fees Every Month? DON’T!

The May 2022 Cocoa futures market was trading up against a potential resistance level near 2740. In addition, the twelve-month contract high was 2801 (10/05/21). On February 8th, the contract began what appeared to be a sell-off after failing to take out the recent highs. The momentum and turning point indicators were both in the over bought territory.

Trend and Momentum: Neutral and Over Bought

Market Strategy: Wrote a put option to collect premium above the current market price and twelve-month contract high.

Recommendation: Sell the April 2022 Cocoa 2900 call at 25 points or $250 (2/08/22). On a fill, placed a liquidation order on 3 points for a gain of $220.

Almost immediately after entering into the position the futures contract broke out above the recent highs, though stayed below the short strike price. The high made was 2838 (2/10/22). After that brief rally the downside momentum kicked into high gear and the futures contract sold-off for six straight trading sessions. On February 18, the order working to buy back the short option and cover the gamma risk (option expiration was March 4, 2022) was filled. Collected $220.

Subscribe to the “Data Feed Trade” service to follow a strategy that will collect premium to cover your monthly data exchange data fees.

May 2022 Cocoa Chart from Bar Chart:

Filed Under: Data Feed Trade

About Don DeBartolo

Don C. DeBartolo is a Series 3 licensed broker registered with the National Futures Association (NFA). As a former arbitrage clerk in the S&P 500 futures pit at the Chicago Mercantile Exchange (CME), Don has floor trading experience. Taking his trade execution expertise and ability to navigate a fast-paced environment, Don transitioned to the brokerage side of the business. Since 2005, he has worked at Daniels Trading, a brokerage firm in the heart of the financial district in Chicago. His responsibilities as a broker include providing market analysis, trade execution, and money management to his clients around the world. In March 2010, he developed a formal trade advisory for clients of the firm seeking specific trade recommendations and subsequent risk management.

Due to his widespread proficiency and experience with the futures and commodity options markets, he is able to offer his clients timely insight, specialized trade recommendations, and educational information through various videos and writings.

Studying at Loyola University Chicago, Don discovered the international sport of rugby. Still today, he plays for the Chicago Griffins, a member of the highest league of rugby competition in the United States. Skill and discipline are two traits that carry over from the pitch to the trading screens.

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