August 22, 2017

Summary of Today’s Options Trades

Vacillation is the word that best describes today’s trading – widely vacillating to be more exact. I bought a few calls early in trading day  (check the earlier post from today) in the S&P 500 (SPY) and an hour and a half later purchased a few calls in the Gold (USO).  The technicals I follow closely moved into a short-term oversold state with an unclosed gap (5/14) looming overhead in the major market index – a set-up that I most often prey upon.  My expectation is to see a short-term move in the SPY that takes index back to $155.89 (the low from 5/13) . An advance in the index would certainly move conversely with the overbought state in Gold (GLD) so I decided to buy a very small position in GLD. I set my limit order for $2.75 , but the market makers only took three of my contracts after the ETF moved briskly lower. Both positions should fare well in the event of a short-term bounce.

Later in the day, the market tested the lows from earlier in the trading day and I decided to buy a larger position (long calls) in the United State Oil Fund (USO). Yes, another long position, but again, I am only playing off of the short-term oversold state in USO so I do not expect to hold this position or any from today’s trading for more than a few days, with the potential for a few hours. More specifically, once the gap closes in USO ($36.08) or a move to a short-term overbought state occurs I plan on exiting the position. As always, I will see what the market offers me and try to take best advantage of the situation at hand. There are no guarantees, so I will again try my best to take what the market offers me.

Here is the USO trade I placed late in the day on the TOS platform (the best platform options trading platform by the way):


Unfortunately, the market moved against my first 2 trades (SPY and GLD) as soon as I placed them and I almost had to exit the SPY trade (nearing stop-loss).  GLD held on nicely and the USO trade that was placed later in the day suffered a minor pullback, but managed to move higher as the closing bell neared. SPY also rallied into the close so tomorrow could be an interesting day for my current positions. I expect to see a continuation of the short-term bounce (up to the gap fill mentioned above) in the S&P 500 (SPY), but of course as we all know, there are no guarantees in trading/investing.