Trading Journal Entry For 4-4-2014

It was another interesting day for markets, though with a relatively predictable net outcome from our point of view. Then again I’m sure there were lots of folks out there on the bullish side as well. But, they were wrong and we were not. However, we’ll surely have our turn at being wrong soon enough. Sooner than we would like I’m sure. US indices spent most of the day in a steady decline, after a very brief early morning pop up near that scary 1,900 even level. A level which we predict we will have a very difficult time overcoming. Personally, we will be going short anytime price starts to flirt with that level again, and then raking in the profits when it backs off, as it surely will. At any rate, today the S&P500 index finished up the day sitting around 1,865, for a decline of nearly 24 points, or 1.25% on the day. The single largest daily decline in quite some time.

s&p500 index daily chart for 4-4-2014

It was also an interesting day for our trading as well as the broader markets. That is because we did things a lot differently that usual today, making a variety of different trades across a total of three different binary options trading platforms. We just felt like “having a little fun,” and we happen to have three separate trading accounts open at the moment, so what the heck, might as well play around a bit on each, right? We have our main trading account at GOptions, of course, and then there is our old account at Traderush which we have just left open. And finally, there is Boss Capital, which we opened an account at just last month for our most recent broker review. We decided to make things interesting by trading a different contract variety at each different broker today. Let’s start with Boss Capital, where we made a Boundary Option trade on Oil.

Boss Capital Binary Options Trading For 4/4/2014

boss capital boundary option opening chart 4-4-2014

For that are unfamiliar with boundary options they are a pretty cool contract type in our opinion. They used to not be available for US traders so this is a positive change as well. With boundary options the trader is simply deciding whether or not the price of the chosen underlying asset will finish within the set boundaries, or outside of those boundaries. The boundaries themselves are set using simple standard deviations. As you can see from the chart above — which was taken right at the time the contract was purchased — the price is exactly centered between the boundaries, and it always will be. That’s because those boundaries are just automatically set at (roughly) one standard deviation away — in each direction — from the current price. And as luck would have it, this trade did in fact finish within the boundary for an ITM expiry.

boss capital boundary option trade outcome 4-4-2014

Boss Capital Boundary Option Trade Summary

Boundary Trade Outcome: ITM
Entry / Expiry Time: 08:57 / 09:30 (PST)
Entry/Market Price: $101.285
Boundary Levels: $101.189 > X < $101.401
Expiry Price (X): $101.295
Amount Invested: $100.00
Returns Offered: 70%
Returns Received: $170.00
Boundary Profit/Loss: + $70.00 Profit

GOptions Binary Options Trading For 4/4/2014

With our GOptions account we decided to trade one of our favorite new contract types, ladder options, of course. We employed a new strategy which we have been working to develop recently for ladder options trading, and we’ll try to at least explain it a little. Though the strategy itself isn’t quite yet ready for public consumption, if you have access to ladder options contracts you may just want to play around with it a bit yourself. First, an image of a ladder option trading chart would be useful here.

goptions ladder options oil trade chart 4-4-2014

We made a total of seven separate ladder contract purchases, but it was really only two separate trades, as you’ll see in a second. You see this strategy involves treating the trade somewhat like a boundary option, except one which you have much more control over. In the image above for our oil trade we took the picture purposely so that you could easily see what’s going on here. You see the mouse arrow positioned right between those two lower strike price levels? That is the area where we are betting that price will wind up around by expiry. Somewhere between those two lines. So how are we investing on this thesis of ours? Simply by purchasing an even number of contracts for each trade. So, we would purchase say (2) Below @ 101.243, and (2) Above @ 101.091. And if price finishes up anywhere within your chosen range, all contracts purchased will be winners. Or, if price goes sharply in one direction, half of your purchased contracts will still be winners!

This is a very crude and basic example of the strategy we are working on, but I’m sure you can probably at least see the potential here. One of the many reason why we are really liking these ladder option contracts. Well, let’s look at the outcomes for these trades shall we.

goptions ladder options trades 4-4-2014

GOptions Ladder Option Trades Summary

Total Ladder Trades: Seven (7) Ladder Option Contracts (two trades)
Trade Outcomes: Five (5) ITM + Two (2) OTM
Total Investments Made: $175.00
Total Returns Received: $197.42
Daily Profit/Loss Totals: + $22.42 Profit
Daily ROI: + 12.81% Net Ladder Option ROI

Traderush Binary Options Trades For 4/4/2014

Lastly, our Traderush account, which treated us very well indeed today. This is where we took advantage of our market thesis that the major US indices would NOT breach that daunting 1,900 level, but instead almost certainly pull back before that, and probably sharply. And lucky for us, that is almost exactly what happened. We made all of our Traderush trades as standard high/low binary option contracts, though not all for the standard $100 investment. All four (4) trades finished ITM by expiry.

s&p500 option builder trade 4-4-2014

S&P500 Index Option Builder – Put Contract

Trade Outcome: ITM
Entry Time / Expiry:
 16:02 / 17:00
Investment: $200.00
Returns Offered: 77%
Entry Rate / Expiry Rate: 1880.660 / 1873.750
Returns Received: $177.00
Profit/Loss: +$77.00 Profit

nasdaq future trade chart 4-4-2014

NASDAQ Future Trade – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 16:03 / 16:15
Investment: $155.00
Returns Offered: 73%
Entry Rate / Expiry Rate: 3553.6250 / 3545.6250
Returns Received: $173.00
Profit/Loss: +$73.00 Profit

traderush s&p future trades for 4-4-2014

S&P500 Future Trades (2) – High/Low Put Options

Trade Outcomes: Two (2) ITM
Entry Time / Expiry:
 17:32 / 18:00
Investment: $200.00
Returns Offered: 73%
Entry Rate / Expiry Rate: 1865.250 / 1864.875
Returns Received: $346.00
Profit/Loss: +$146.00 Profit

traderush investments history for 4-4-2014

Daily Investment Totals For 4/4/2014

High/Low Trades Closed: Four (4) Put Option
High/Low Outcomes:
 Four (4) ITM
High/Low Investments: $555.00
Returns Received: $968.15
High/Low Profit or Loss: +$413.15 Profit

Ladder Option Trades: Seven (7) Contracts on Two (2) Trade Groups
Ladder Option Outcomes: Five (5) ITM + Two (2) OTM
Ladder Option Investments: $175.00
Ladder Returns Received: $197.42
Ladder Profit/Loss Totals: + $22.42 Profit

Boundary Option Trades: One (1) Contract
Boundary Trade Outcome: ITM
Amount Invested: $100
Returns Received: $170.00
Boundary Profit/Loss: + $70.00 Profit

Total Daily Investments: $830.00
Total Daily Returns Received: $1,335.57
Total Daily Profit/Loss: $505.57
Total Daily Net ROI: = +60.91% Daily ROI

Not bad for about an hour’s worth of “work.” Not bad at all. That will also certainly make our weekly totals look a lot nicer as well. We will try to get that published tomorrow. We should be in for another interesting week for the markets next week, so stay tuned for that and be ready. Good luck out there, trade smart and be lucky all!

Monday, 31st Trades | No Tuesday Trades | Wednesday, 2nd Trades | No Thursday Trades

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