Update - Re: Our Trades on the September 2008 Mini-Sized Dow 13,000 Call Option and 11,500 Put Option
6/8/2008 12:32:07 PM
Welcome to The JE.D.I. Trader.
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
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.
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.
And remember, follow THE J.E.D.I. WAY, and the force will be with you.