BIG Profits on Short Term Puts and Holding Long Calls — June 10 Trade Log
On the expectation of Powell’s conference today markets were relatively flat to start off the morning, slightly inclining to the negative side but coming back towards midday. There was no negative news on Powell’s conference nonetheless markets seemed to have taken his commentaries the wrong way, once again he stated that the FED would not spare any money supporting the market and interest rates will remain in the historic lows until at least 2022.
The SPY closed off on negative numbers and futures for all indices kept running low. Most indices and stocks came from a strong rally as seen in the graph above, of course markets must make slight price corrections on their way up, it can’t always be positive and we were expecting something like this to happen.
PROFITS
We could not guarantee the market’s direction so we sold the contracts early in the morning, we like to sell early since premiums usually trade at higher prices. We took amazing profits from these puts. We were covered for a slight downside, we cannot tell whether or not the selloff will stop tomorrow, but at least we were able to realize profits from these.
UNREALIZED LOSSES
The total for unrealized losses was HUGE and it is in fact quite scary, some trades were well thought off and we were bound to see losses, the CALLs were placed as covers for the PUTs if we were profiting from one we would be losing on the others. Above there are some positions that are still PUTs which we were expecting a slight correction, these were rather speculative trades, even though they are losing as well and weighing down the value of our account, the market must take a direction and with the VIX as high as it is right now volatility is guaranteed.
These are short term contracts but still have all next week at the very least, if the stocks make a strong comeback or start moving closer to the STRIKE prices by the following week after this slight correction they can have really attractive appreciations percentage-wise and nominally speaking due to the volatility of close to expiration.
