The March Euro is up 44 ticks at 1.4377 this morning as I write. The included chart shows that the Euro is still in an intermediate term down trend but is beginning to show support just above the 200 day moving average. The directional movement indicators are still bearish but narrowing and the ADX line is beginning to turn down suggesting that the down swing in prices may be coming to an end. Yesterday, as I began seeing this unfold, I recommend to liquidate our deep in-the-money covered put write trade. Here are the results from that trade. We covered our short Euro futures contract at 1.4338 for a gross profit of $5387.50 and we liquidated the short March Euro 1.5100 put option at 820 ticks for a gross loss of $3562.50, so the overall gross gain on this trade was $1825.00!
We will continue to hold the ratio call and put spreads. Happy New Year!
Followers should be long one March Euro (1.3850 strike) put from 121 ticks and short 2 March Euro (1.3400 strike) put options from 67 ticks each for an overall credit of 13 ticks or $162.50 gross.
You should also be long one March Euro (1.5750 strike) call option at 134 ticks and short 2 March Euro (1.6100 strike) calls at 75 ticks each for an overall credit of 16 ticks or $200 gross.
March Euro options expire in 64 days.
The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.
This newsletter is not intended for dissemination to the public without prior approval from David Hall.