Oct 312015
 

Market Conditions

Trick or treat? The S&P 500 was up for a fifth consecutive week posting its largest monthly gain since October 2011. The large-cap index racked up 159.71 points in the past thirty days for a staggering 8.32% monthly gain. On Wednesday all of the major indexes rallied, including the laggard Russell 2000, in response to the FOMC announcement that interest rates would remain unchanged for now. The Fed has opened the door to a potential rate hike in December. Other economic news was mixed this week with consumer confidence coming in much lower than expected on Tuesday (97.6 actual vs. 103 expected). On the other hand, the Chicago PMI reported on Friday morning was extremely strong (56.2 actual vs 49.4 expected) driving the markets lower – another case of good news being bad news. The SPX opened on Monday at  2,075.08 and closed Friday at 2,079.36, up only 4.28 or 0.21% for the week.

Chart_103015_SPX

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Oct 272015
 

thetatrendAs an active trader, I am always interested in learning about different trading strategies. I have two or three strategies that I have been able to learn and trade with consistent results, but not all strategies will work in all market environments. Additionally, not all trading strategies are compatible with the trader, whether it be their risk tolerance or perhaps their account size. Regular readers of this blog know that I have been experimenting with a weekly straddle strategy using S&P 500 futures options. The strategy is a proven strategy, but it is not working for me simply because the positions are too large for my account. When this happens, it puts a psychological strain on the trader which makes it nearly impossible to make rational trading decisions. In my own personal situation, I have decided to just look for a graceful way to exit the trades even if I don’t make a profit. It has been a learning experience, but at this point, it is not an appropriate strategy for me. But this article is not about me or my trading. It is about a new options trading course that was just introduced this week – the CIB Trading Course from Theta Trend.

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Oct 242015
 

Market Conditions

Up, up and away! The mid- and large-cap indexes continued their rally from last week landing the S&P 500 in positive territory for the year. On Thursday, the SPX soared 1.7%, closing above the 100-day moving average for the first time since August 17, as hopes for more stimulus overshadowed mixed corporate earnings. This was all in response to comments from European Central Bank President Mario Draghi, revealing that the governing council had discussed lowering the deposit facility rate. On the heels of that, China announced a surprise rate cut on Friday, lowering it’s one-year lending rate by 25 basis points to 4.35% and cutting its reserve requirement ratio by 50 basis points for qualifying institutions. The SPX opened on Monday at 2,031.73 and closed Friday at 2,075.15, up 43.77 or 2.15%, marking the fourth week in a row that the index has climbed higher.

Chart_102315_SPXFib

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Oct 212015
 

margin-callThere has not been a dull moment today which started this morning with a margin call from TDAmeritrade. How could that even be possible since I still have buying power showing on my trading platform? Before I get into that, let’s first look at a new position that I put on yesterday – another /ES at-the-money straddle. With the S&P 500 futures trading at their highest point since August 20th, I sold the /ES Dec 15 2025 straddle. The details of the trade are shown below.

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Oct 192015
 

OptionAlphaGraphicReaders of this blog know that I endorse very few trading websites or services, most of which were discussed in the blog post, Trading Mentors. One website in particular stands out when it comes to offering comprehensive daily training videos on options trading at an affordable price – OptionAlpha.com. When I began my recent foray back into the world of options trading several years ago, Kirk DuPlessis’ OptionAlpha.com is where I first turned. Kirk has been a great mentor to me and I was quite surprised when he invited me to be on the OptionAlpha.com podcast, currently one of the top-rated investment podcasts. Today the show went live and you can hear the interview by clicking below.

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