Exit Alert - 30 Day Fed Funds

By: Patrice Johnson | Sun, Feb 8, 2009
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2/8/2009 5:10:53 PM

Greetings, J.E.D.I.

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LONG TERM TREND SIGNAL: DOWN

This e-mail is to alert you that The J.E.D.I. Way will close out its straddle position on the February 2009 30 Day Fed Funds on Monday, February 9 ,2009 by taking the following action:

(1) Sell to close one (1) 30 Day Fed Funds February 2009 99.75 Call (Ticker Symbol: FFG999.75C) at a limit price of $0.02 Good for the Day.

(2) Let one (1) 30 Day Fed Funds February 2009 99.00 Put (Ticker Symbol: FFG999.00P) expire at expiration date on February 20, 2009.

Note: We purchased the call option on November 8, 2008 and received a fill at $0.015. We also received a fill of $0.015 for the put option purchase on November 8, 2008. Our total cost for purchasing the straddle on November 8, 2008 of the February 2009 30 Day Fed Funds totaled $ 153.63 ($0.03/.25 x 10.4175 x 100 + $28.62 (commissions: 14.31 x 2)

A fill price of $0.02 will cut The J.E.D.I. Way's losses on the February 2009 30 Day Fed Funds to $84.60 ($0.03 [initial purchase price paid for straddle] minus .02 [price we will attempt to exit straddle at] /.25 x 10.4175 x 100 minus $42.93 in commissions [$14.31 x 3])

The February 2009 30 Day Fed Funds Chart above appears to be taking on the shape of a rounding topping pattern which may imply that prices on this particular month's contract has peaked.

Thus close out your straddle position on the February 2009 30 Day Fed Funds using the tactical strategy referenced above.

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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