Trading Journal Entry For Friday 3-28-2014

We experienced a bit of a change of gears today, with markets gapping up mildly at the open, and basically never looking back all day. However, with that said it doesn’t appear to have changed the overall technical picture, and certainly we’ve had no fundamental, macro level changes of any significance. As we head into the weekend our position would be that traders should remain cautious, and that we are still in correction mode, despite today’s modest gains. We would not want to be overly exposed long heading into this weekend, that’s for sure. The S&P500 index, like other major US indices today, rose sharply in the early morning hours, then slowly but steadily bled off some of those gains throughout the day, before finally getting a bit of a boost in the last hour of trading.

daily s&p500 index chart for 3-28-2014

It was a day of mild gains for our trading account as well as the broader market indices, and that kept us in profitable territory for the week overall. Though not by as much as we would have liked. For our trading today we stuck strictly with the standard high/low binary option contracts, making three trades in total for the day. Ladder options have been mostly closed the last two days due to a combination of extreme volatility in those assets, and very low trading volume (no liquidity). But our first trade of the day — on the good ol’ S&P500 — was actually the last trade to expire for the day, right at the closing bell in fact. So first we’ll take a look at the next two trades, which were purchased with short expiry windows of less than an hour.

gold high/low put option trade for 3-28-2014

About an hour and a half after entering our first trade of the day — using a longer-term contract with a 3 1/2 hour expiry window — we got into our next two trades barely 30 seconds apart. The first of them though was on everyone’s favorite shiny metal, Gold. Though I’m sure it isn’t looking nearly as shiny to gold bugs as it was last year. Well, it didn’t treat us all that well today either. Price looked like it might be moving back into a downward trend here (the chart image above was taken at the time of purchase), but instead was merely correcting a bit as it had the hour before, and soon was on its way back up.

Gold Trade Summary – High/Low Put Option

Trade Outcome: OTM
Entry Time / Expiry:
 18:00:08 / 18:30
Investment: $100.00
Returns Offered: 76%
Entry Rate / Expiry Rate: 1292.92 / 1293.95
Returns Received: $0.00
Profit/Loss: -$100.00 Loss

high/low oil put option trade for 3-28-2014

This next trade, entered just 36 seconds after the last one, went much better than the last. And it was a much better technical setup, with a much higher probability for success. You can probably see for yourself from the chart image above (again, taken at the time of entry) that we were trading on a retreat from its current highs. Highs which it has previously failed to breach several times already this day. And indeed this is exactly what happened again, with price pulling back fairly sharply from these levels shortly after we got into the trade for a solid ITM finish by expiry.

Oil Trade Summary – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 18:00:46 / 18:30
Investment: $100.00
Returns Offered: 76%
Entry Rate / Expiry Rate: 1292.92 / 1293.95
Returns Received: $176.00
Profit/Loss: +$76.00 Profit

At this point in the day we found ourselves slightly down with a 1/1 win/loss split, and sorely tempted to make a couple more trades to improve those numbers. However, after about 20 minutes of “chart surfing” and still not seeing anything particularly promising we decided to just wait for the outcome of our still open, longer-term S&P500 trade made earlier. This trade was expiring at market close so if it went poorly it would be too late to do anything about it. But at this point when we looked in on it things were looking pretty good, with about 5 points of ITM “cushion”, and less than an hour remaining in the US trading day. So we felt pretty confident about the trade finishing well. We had also made the trade for a bit larger an investment than “normal” at $124 and some change, so the potential returns on the trade were $219 and some change. Enough to make sure we remained in profitable territory for the week.

s&p500 index put option trade for 3-28-2014

S&P500 Trade Summary – High/Low Put Option

Trade Outcome: ITM
Entry Time / Expiry:
 16:28 / 20:00
Investment: $124.52
Returns Offered: 76%
Entry Rate / Expiry Rate: 1292.92 / 1293.95
Returns Received: $219.16
Profit/Loss: +$94.64 Profit

daily investments history totals for 3-28-2014

Daily Investment Totals For 3/28/2014

Total Trades Entered: Three (3) Standard High/Low
Daily Trading Outcomes:
 Two (2) ITM + One (1) OTM
Total Investments: $324.52
Total Returns Received: $395.16
Total Daily Profit/Loss: +$70.64 Daily Profit
Daily ROI: +21.77% Daily ROI

$70 profit isn’t great considering we probably put in more than an hour of trading “work” today. It is, however, a heck of a lot better than a loss so we’re thankful for that at least. And it was enough to make it a profitable week overall, if not by much, so that’s good as well. There is one more trading day left this month, Monday the 31st, so we can’t put together the monthly trading roundup this weekend, but we will get out the weekly roundup for this week at least. So until next time folks, trade smart and be lucky!

Monday, 24th Trades | No Tuesday Trades | No Wednesday Trades | Thursday, 27th Trades

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