March trade netted out 6.4% or $640 per $10k in account so the running total for the year so far is 14% and we are in the middle of the third week of March and well on our way to our goal of meeting and exceeding 20% annual returns.
There is always risk in trading and there is also reward, you want to keep the two in a balance that is profitable long term.
The current reward left in our March trade is only 3 pts and so we will close that out for those three pts and take the profit.
Closing the Mar ES 1900 calls and the Mar ES 1840 puts for a combined price of 3 pts.
The initial sale of this spread was 16 pts for a profit of 13 pts or 6.5% on the one spread per $10k in account.
The ES has been trending strongly making neutral calls difficult but with the time remaining for this month’s options this becomes a good time to place our trade. Selling the Mar ES 1900 calls for 8 pts and the same strike 1840 puts for 8 pts. The expiration is two weeks from tomorrow so the trade could produce a nice return in a short period.
As mentioned earlier, the markets tend to close options expiration at big numbers, 1800, 1850 and 1900 so this call “should” come out nicely, it has high probability of doing so. My outlook is longer term trading so if we need to adjust we are always able to do so.
Total premium paid was 29.5 pts and we covered at a total of 14 pts and had three commissions for $15 total. Our net on the year then is 15.5 pts positive which is $775 minus $15 commissions for $760 profit. Per $10k that equates to a 7.6% return and we are about 6 weeks into the year. With the overall market still down around 1.5% for the year you can clearly see why this diversification model is important to your overall increased safety in the market!
The market has been quite strong after the decline that ultimately held solid, so with weakness today I am closing our trade out by buying back the final leg still open which is the Feb ES 1810 call for 12.25 pts. This gives us a nice profit to start the year. I will review the trade and update when those numbers are figured.
There is little reason to hang onto the Feb ES 1750 put when it is trading under 2 pts. I am buying back at 1.75.
I am watching the remaining short call 1810 basis Feb for further strength in the market. Any market weakness will be cause to cover over the next day or two. If not we will look to adjust out to the Mar contract and add an offsetting put.
Markets were not able to defend 1750 in a solid manner but have now recovered and are well above our 1750 put strike.
No adjustments were made since we had price protection down to the 1720 level. With the market now near the 1770 level we are up in the trade on our notional $10k account per contract 5% for the year. We continue to watch closely!
The market for the time being has defended the ES Mar contract basis 1750 well this week. We are positive in our premium by a few pts now and will monitor closely next week as well. I do expect another run at the downside early next week and if the market holds the 1750 area well and we start going back into the 1800’s and close there, should be clear sailing up to 1850 with next stop at 1900.
I am buying back the Feb ES 1880 call and selling same month 1810 call for an additional 11.5 pts in premium to the initial 18 pts.
The is paid then 29.5 pts and the current market value is 30 pts so we are slightly negative in the trade currently. The current market price is however out of the money for either side of the trade meaning that if the market closes here, the entire premium would be ours to keep.
As mentioned before the market is seeking a value area and first target for that would be 1750 via the Mar ES contract. If the market does not hold that area there will be another adjustment coming.
Goal20percent 