Entry Alert - Mini-sized DOW

By: Patrice Johnson | Mon, Sep 1, 2008
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8/31/2008 5:09:38 PM

Greetings, J.E.D.I.

Welcome to The J.E.D.I. Trader.

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

This e-mail is to alert you that our sell to open one (1) Mini-Sized Dow 11,600 Call Option (Ticker Symbol: YMU811,600C) at $231.00 went unfilled on Monday, August 25, 2008 and that my stance has not changed regarding the Mini-Sized Dow Index. I am bearish as long as this index remains below the 13,000 level. And as long as the Mini-Sized Dow Index remains below 13,000, I will be looking to sell the calls or buying the puts on this index.

With that, place an order to sell one September 2008 11,600 Call Option at a limit price of $178.00.

Last Price for the Mini-Sized Dow Futures Index as of August 29, 2008: $11,541.00

Current Price of the September 2008 MiniSized Dow 11,600 Call Option: $178.00

Total Cost

($890)

Initial Margin Requirement

$2,856

Maintenance Requirement

$2,285

Total Requirements

$2,285

Estimated Commission

$12.99

Expiration Date of Options Contract: September 19, 2008

Tick Size: 1 point = $5.00

Breakeven Point:

The breakeven point for selling one September 2008 Mini-Sized Dow 11,600 Call Option at $178.00 limit on Tuesday, September 2, 2008 is $11,772.80 (assuming you get filled at $178.00). That is, this position will begin to lose money if the Mini-Sized Dow closes above $11,772.80 at expiration. (178x5 minus (12.99x2 commissions) divided by 5 tick size + 11,600)

Note: If the September 2008 Mini-Sized Dow 11,600 Call Option closes below 11,600 at expiration (September 19, 2008), you will be able to keep the option premium of $864.02. (178x5 minus (12.99x2 commissions))

Note: Place an order to buy to open one (1) September 2008 Mini-Sized Dow 12,050 Call Option (YMU812,050C) at the limit price "only if" the Mini-Sized Dow Futues Index price closes at or above 11,800 for three consecutive days on noticeably higher than normal volume.

My fellow J.E.D.I.,

Please see the daily and weekly chart for the September 2008 MiniSized Dow below DATED August 29, 2008.

DAILY CHART

WEEKLY CHART

Summary:

So, sell one September 2008 11,600 Call Option (Ticker Symbol: YMU811,600C) at a limit price of $178.00 on Tuesday, September 2, 2008.

Good Luck!

And may the force of volatility will be with you.

Best Regards,

 


 

Patrice Johnson

Author: Patrice Johnson

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

Patrice V. Johnson

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