After some fairly decent gains early on, which held through the majority of the day, most major indices ended up just slightly in the red by closing, with afternoon declines wiping out those earlier gains. It was not the follow-through decline which we were hoping for to push our long-term trades back into the ITM zone, but neither was it a surprise at this point. As you can see in the DOW index chart (DJI) below, the steady bleed-off started around noon (EST), and then accelerated in the final hour of trading.
It was only a half-day of trading for us today. The first half of the day to be precise. In total we actually only spent about 35 minutes on our account today between chart cycling for potential trades, technical analysis on those potentials, and then doing the actual trading itself. So it was really a very short day. Which may be unfortunate because things were certainly going a lot better today than the previous two days. But let’s look at what we actually did do today, before moving on to briefly cover the outcomes on those long-term trades we’ve had open for a while.
The image just above shows our first trade of the day, on the EUR/USD currency pair just after opening. For a change you can actually see the chart analysis that lead us to this trade right on the simple “home screen” chart pictured here. We purchased this as a put option with a very short-term expiry (just 6 1/2 minutes) just as price was touching, for the second time in just a short period, a short-term high of the last few hours. We believed that there was a very good chance that price would pull back a bit from that level prior to expiry, if only for a short time. And indeed, that is exactly what happened. Although it was actually a bit closer than we liked, it worked out fine in the end.
EUR/USD Trade Summary – High/Low Put Option
Trade Outcome: ITM
Entry Time / Expiry: 17:23 / 17:30
Returns Offered: 81%
Entry Rate / Expiry Rate: 1.37293 / 1.37283
Returns Received: $181.00
Profit/Loss: $81.00 Profit
This next trade was made just 8 minutes later, just after the first one closed out at a profit. The chart above shows the GBP/CHF trade just after we opened it, and looking good so far. We were, however, less confident in the timing of this trade. We felt pretty strongly that price would shortly go up, but it very well could have remained flat to slightly down for long enough to make the trade a dud. Luckily for us, it did nothing of the sort, and instead finished comfortably in-the-money (ITM).
GBP/CHF Trade Summary – High/Low Call Option
Trade Outcome: ITM
Entry Time / Expiry: 17:31 / 18:00
Returns Offered: 70%
Entry Rate / Expiry Rate: 1.47686 / 1.47711
Returns Received: $85.00
Profit/Loss: $35.00 Profit
Which brings us to the day’s totals. It was a short day in terms of both the amount of time spent on trading, and the total number of trades made. This was basically true for the week as a whole, we were much less active than last week. This was partly due to a short trading week, (only 3 days for us) but mostly due to general market conditions, which were not at all favorable to our current outlook and investment thesis. Anyway, on to the totals…
2-21-2014 Daily Investment History Totals
Trades Made: Two (2) High/Low Contracts
Trade Outcomes: Two (2) ITM
Total Investments: $150.00
Total Returns Received: $266.00
Total Daily Profit/Loss: +$116 Daily Profit
Daily ROI: +77.3% Daily ROI
The weekly totals will be in tomorrow’s weekly roundup post, of course, but we did want to briefly cover the outcomes from those two long-term trades that have been open for one and two weeks, respectively. Unfortunately, both of them ended duds after moving into red territory on Thursday’s gains, and never looking back after that. They were both looking pretty good as recently as Wednesday, but ended as significant losses at the finish line. Our largest loss in over two months actually. Ouch. These trades will have a significant impact on our monthly totals, so we had better do well the rest of it.
S&P Futures Trade Summary – Long-Term Put Options
Trade Outcomes: Two (2) OTM
Entry Times | Expiry Times: (14/2) & (18/2) | Both (21/2) Expiry
Investment Totals: $527.00
Returns Received: A Big Fat Zero!
Profit/Loss: A Total Loss of $527.00 – Ouch again
That doesn’t bring us into negative territory for the month overall, but it does erase pretty much all of our profits so far. In fact I do believe that we are pretty close to break even right now. So the monthly totals will be entirely dependent on these last 7 or so days of trading. That’s assuming we are actively trading every day. We shall see. So until next time folks, thanks for stopping by, and don’t forget to trade smart and be lucky!