Update - Re: Our Trades on the September 2008 Mini-Sized Dow 13,000 Call Option and 11,500 Put Option

By: Patrice Johnson | Sun, Jun 8, 2008
Print Email

6/8/2008 12:32:07 PM

Hello Everyone.

Welcome to The JE.D.I. Trader.

To learn more about my Stocks, Options & Options on Futures Trading Service, click here.

LONG TERM TREND SIGNAL: DOWN

INTERMEDIATE TERM TREND SIGNAL: DOWN

STOCK, OPTION, OR FUTURE UNDER ANALYSIS:

MINISIZED DOW FUTURES INDEX SEPTEMBER 2008 13,000 CALL OPTION AND SEPTEMBER 2008 11,500 PUT OPTION

TICKER SYMBOL FOR SEPTEMBER 2008 MINISIZED DOW 13,000 CALL OPTION: YMU813000C

TICKER SYMBOL FOR SEPTEMBER 2008 MINISIZED DOW 11,500 PUT OPTION: YMU811500P

EXPIRATION DATE OF OPTIONS CONTRACT: SEPTEMBER 19, 2008

EXPIRATION DATE OF FUTURES CONTRACT: SEPTEMBER 18, 2008

TICK SIZE: 1 point = $5.00

INITIAL MARGIN: $2813

MAINTENANCE MARGIN: $2250

FIRST NOTICE DAY: Not Applicable (N/A) - Minisized Dow Index is cash settled.

This e-mail is to alert you that the sell to open order for one Mini-size Dow Index September 2008 11,500 Put Option (Ticker Symbol: YMU811,500P) at limit price of $250.00 was filled only at our price of $250.00 on Wednesday, June 4, 2008 and our sell to open one Mini-sized Dow Index September 2008 13,000 Call Option (Ticker Symbol YMU813,000C) at a limit price of $236.00, good for the day was filled on Thursday, June 5, 2008 at our price of $236.00.

Total Proceeds received at expiration (on September 19, 2008) if the September 2008 Mini-sized Dow Index trades above 11,500 and below 13,000 is $2371.36 ($250.00 + $236.00 = $486 X5 = $2430.00 minus $29.32 x 2 (commissions).

That amounts to $592.84/month in additional income (for the period of June 2008 to September 2008): $2371.36/4 months.

Our breakeven points before this trade losses money is as follows:

Our breakeven point for selling the September 2008 11, 500 Put Option at $250.00 plus commissions of $29.32 is $11,279.32 ($11,500 minus $250 + $29.32). That is this position will begin to lose money if the minisized dow falls below $11, 279.32 ($11,043.32 if we maintain the call option position)

Our breakeven point for selling the September 2008 13,000 Call Option at $236.00 plus commissions of $29.32 is $13,206.68 ($13,000 plus $236.00 minus $29.32 (commissions)). That is this position will begin to lose money if the minisized dow rises above $13, 206.68. ($13,456.68 if we maintan the put option position)

STATUS REPORT OF OUR POSITION IS BELOW:

WEEK 1 (6/8/08): -$120.00

September 2008 13,000 Call Option = +$220.00

September 2008 11,500 Put Option = -$340.00

Difference: -$120.00

If we only sold the call, our account would show of gain of $220.00. If we only sold the put, our position would show a loss of -$340.00. However, because we sold both the call and put option, our account for the first week ending June 8, 2008 is down $120.00.

Next week the Mini-sized Dow Futures should bounce back. However, I do not see prices clearing $13,000 on this index next week. It could test the 12,500 level though. I also do not believe that the Mini-sized Dow index will fall below 11,500 next week either. But we could see 12,000 after the test of the 12,500 level.

My fellow J.E.D.I.,

Please see weekly and daily chart below of the Mini-Sized Dow Index dated June 6, 2008.

WEEKLY CHART:

DAILY CHART:

So, maintain both positions, for now. And watch the following levels on the MiniSized Dow Index:

$11, 279.32 ($11, 043.32) for the September 2008 11,500 Put Option we sold on June 4, 2008 and

$13,206.68 ($13,456.68) for the September 2008 13,300 Call Option we sold on June 5, 2008.

Good Luck!

And remember, follow THE J.E.D.I. WAY, and the force will be with you.

Best Regards,

 


 

Patrice Johnson

Author: Patrice Johnson

Patrice V. Johnson
The J.E.D.I Way

Patrice V. Johnson

DISCLAIMER:
The information contained in this report and future reports and newsletters contain independent analyses, statements, opinions, beliefs, and strategies that are mine and not those of the company and is made available to anyone interested in my analyses, statements, opinions, beliefs, and strategies made on stocks, options, futures, or options on futures. Information, analyses, statements, options, beliefs, and strategies in this e-mail are for informational purposes only. I do not represent that the information, analyses, statements, opinions, beliefs, and strategies contained in this report or future reports and newsletters are accurate or complete. Internet subscribers and online readers should not rely upon this information for any purpose without seeking the expertise of a professional investment advisor, professional tax consultant and/or broker. The information contained in this report and future reports and newsletters is provided only as general information that may or may not reflect the most current developments; accordingly, information, analyses, statements, opinions, beliefs, and strategies contained in this report and future reports and newsletters is not promised or guaranteed to be correct or complete. The analyses, statements, information, opinions, beliefs, and strategies contained in this report is not a recommendation to buy, sell, or hold any stock, option, future, or option on future. Nor are the statements, analysis, information, opinions, beliefs, and strategies contained in this report or in future reports and newsletters an offer for any stock, option, future, or option on future or solicit the offer of any stock, option, future, or option on future of any company. I will trade securities of the companies on which I report during the term of engagement. Patrice V. Johnson, expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this report, and future reports, and newsletters. I assume no responsibility for your trading and investment results. You assume all responsibility for your trading and investment results. You may send me e-mail to Patrice@Stockbarometer.com . However, you should not send confidential or sensitive information via e-mail as the security of the Internet e-mail is uncertain. By sending sensitive or confidential e-mail messages that are not encrypted, you accept the risk of such uncertainty and possible lack of confidentiality over the Internet. I do not necessarily endorse, and is not responsible for, any third-party content that may be accessed through this report, and future reports, and newsletters.

Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.

Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.

Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.

In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.

For a complete understanding of the risks associated with trading, see our Risk Disclosure.

Copyright © 2008-2010 Patrice V. Johnson

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com