My usual blog theme was hacked, so I have this generic view showing. I’m working on fixing it, but have moved my focus to trading for the meantime.
I’m already short 10 TLT September $124 calls that are in the money, but when I saw TLT trade into the upper $128s, I figured the timing was right to add to my short position. I’m not aggressive enough to add to the same strike, but figured more naked calls out of the money could be a smart move.
While TLT was trading at $127.73, I sold 10 TLT September $132 naked calls for $1.15 each and received $1,145.73 after paying $4.27 in commission. I could’ve made more if I reacted quicker this morning, but was happy to get my trade in just before 10:00 while TLT was still much higher than it ended the day. When I first placed my order, I tried for the $133 strike, but TLT was already sliding from its highs and I had to drop my strike by a dollar to get the fat premium I wanted.
My logic is that I might be assigned the TLT September $124 calls and it’ll be nice to have an extra realized gain $1,145.73 to cut into my paper losses while I remain short the first lot. If TLT surprises me and runs above $133 and I have to take an assignment on another 1,000 shares, my average cost per share will be much higher and will make it even easier to work the trade for a profit. If I’m assigned the first lot of 1,000 shares at $124 and the $132 calls expire worthless, I’ll plan to sell covered puts out of the money and will sell more naked calls out of the money again.
With my first lot of naked calls $2.34 in the money as of the close of trading, I wouldn’t be surprised if I was forced into an early assignment at the end of the month, just before TLT goes ex-dividend. There’s a lot of time between now and then, so TLT could be $5 or more in either direction before that becomes an opportunity for the call owner. TLT swung in a $3.10 range today and could do the same for a while.
What I liked seeing was that while the S&P 500 fell 77 points and the Dow dropped 583, TLT finished a tad bit lower instead of holding onto its gains. That’s bullish signal for stocks and a bearish signal for bonds in my opinion. These next few days will surely be wild as everything starts to settle down before long.
I’m really shocked that I haven’t made a trade since July options expiration. That was just over a month ago and is the longest I’ve gone without making a trade in this account since I started blogging in April 2007. The main reason for my lack of trading was that I couldn’t find something I wanted to trade in the past five weeks. In the past, I would’ve forced a trade, but I’ve learned not to be overly aggressive when the set-up isn’t there. I’m around 88% invested thanks to my hedges, so I shouldn’t be down as much as the indexes. However, my DIS position got spanked and is costing me a heavy paper loss. My TLT naked calls have moved against me too. I’m still confident on both of these positions and plan to add to both, possibly as early as next week.
Even without recent trades, I had three different options expire today from trades I made a while ago. All were in the money and I’ll be taking assignments on all three. Coming into today, I had one DIS August $115 put, two IWM August $124 puts and one IWM August $126 put.
DIS was my biggest surprise. After Disney hit a high of $122.07 earlier this month and I considered raising my DIS naked put strike to $120.00, but wanted to see a slight draw down first. Instead of a little dip, it broke below bear market territory, 20% lower on an intraday basis. I don’t expect it to fall below $90 and think $95 has a good shot of holding. I’ll be purchasing 100 shares of DIS at $115.00 from my short put with a cost per share after the put premium is deducted of $109.24. I’ll start considering new $95 strike puts to couple with my new holding. I don’t plan to sell covered calls any time soon since I expect DIS to push back towards new highs within a few months.
I wasn’t terribly surprised to be assigned my IWM puts. I was hopeful I’d get out of them closer to the money, but smart enough to hedge a couple of them. I’ll end up buying 300 shares of IWM – 200 shares at $124 and 100 shares at $126 and will have a net cost per share after deducting premiums of $121.79. Like my DIS shares, I do not plan to sell covered calls on my long shares in the near-term. I see IWM, and the other major index ETFs, as oversold and expect a bounce next week. I saw the Williams %R reading for the 14, 28 and 56 day indicators and decided we could be close to a reversal from oversold levels. All three indicators are close to -100, which tends to foreshadow a rebound within two days. Today is the first day of the two days, after the indicators bottomed yesterday. Monday could show more weakness or go ahead and push higher after opening lower.
My two IWM January $124 long puts helped to cut my paper losses this week, but I’m still down more than $7,000 from my highs this year. Part of this paper loss comes from my TLT $124 puts that expire next month. They are more than $2 in the money now and are trading around $3.35 as I write this at the end of the trading session. I’m not worried about getting out of this position within a few months and fully expect to come out with a great profit again. I’ll even add to the short position on further TLT strength. The TLT October $131 calls are trading around $1.24 now and would help dollar cost average the prices where I might short the first lot of shares if assigned. If not assigned, it’d be a nice profit to help me out. I’m not ready to make this trade yet, but could on Monday or Tuesday. TLT was only up 0.3% today while the SPX fell 3.14%. That shows me the longer end of the treasury yield doesn’t have a lot of life left in it. I’m waiting until next week to make that trade, just in case it has a big spike to start the week.
Here are some of the major index returns from their peaks:
- Dow Jones down 10.26%
- S&P 500 down 7.56%
- Mid-Cap Index down 8.28%
- Small Cap Index down 11.4%
I like seeing the fact that we’ve finally hit a correction on the Dow and Russell 2000. Maybe we can get some more normalized trading ranges established soon.
July was a slow trading month for me, but my account gained ground and I’m ahead of all major indexes for the past year and the year-to-date (double the Dow for the past 12 months). The S&P 500 had a better month than the other indexes, so I was happy to see my results closer to the broader large-cap returns than the losses seen in the Russell 2000. China will continue to be the biggest distraction for a while and then we’ll get back to watching the Fed and potential interest rate hikes as soon as September. My account balance made it above $11,000 again in July, but I slipped a few bucks at the end of the month to finish just below the mark. TLT continued to be my biggest moneymaker in July while SPY and FEZ helped some too. TLT has run higher recently and pushed my latest naked calls to a paper loss, but I have nearly $1.50 before TLT breaks above my strike. If/when TLT retreats again, I’ll see my account balance push towards new highs for the year, assuming my other stock and ETF positions don’t tank in the meantime.
I ended July with a Net Liquidation Value (NLV) of $110,959.24 and a Net Asset Value (NAV) of $110,999.68 according to Interactive Brokers (IB) after finishing June with an NLV of $109,769.30. That gave me a gain of $1,189.94(~1.08%) on paper for July and a realized gain for the month of $1,124.63 on four closing trades. I didn’t receive or have to pay any in dividends in July since I’m not long or short any stocks or ETFs. Quicken reported that I have $110,999.70. I left the $0.01 error in place to see if it corrects next month as the rounding errors occasionally do.
I only have three options set to expire in August, a DIS August $115 naked put that is $5.00 out of the money and two IWM puts (two at the $124 strike and one at $126) that are in the money a little. I’ll probably roll the DIS put higher soon, up to the $120 strike and would prefer to do it on a down day for DIS, but those haven’t been coming very frequently lately. I might roll the IWM puts out further, but don’t see me raising the strikes at all anytime soon. I could sell more TLT naked calls at higher strikes, but want to wait more than a few days on that decision to see if the 20-year Treasury ETF can lose some momentum before I get overextended.
If all of my naked puts were assigned, I would be 88.85% invested in this account (93.18% without the spreads). I am invested 0.77 percentage points lower than I was at the end of June. As with last month, the amount I’m invested is somewhat misleading. The percentage is correct, but since I have two positions hedged, I won’t incur losses on two of my IWM and one of my SPY puts until they fall close to 10%. In a shallow correction, my losses will be less than my percentage shows. In a bear market, my losses will be close to 95% of the market’s losses after that first ~10%.
This is my asset allocation in my IB account as of the end of July:
- Large-cap ETF: 17.57% (I accounted for my SPY March 2016 put spread within this)
- Mid-Cap ETFs: 25.23%
- Small-Cap ETF: 36.23% (I accounted for my IWM January 2016 put spread within this)
- International: 7.21%
- Individual Stocks & Other Sector ETFs: 10.36%
- Bonds: 0.0% (not including my TLT call spread)
- Short ETFs: 0.0%
These are my returns according to Quicken through July 31, 2015:
- YTD Return: +11.82%
- 1 Year Return: +18.58%
- Average Annual (not cumulative) Return since November 18, 2009 (when I opened my IB account): +9.31%
According to Morningstar, here’s how I compare to the major indexes (including dividends) through the month’s last trading day, July 31, 2015:
- Dow Jones Return: YTD change +0.55%, 1 year change +9.34%
- S&P 500 Return: YTD change +3.35%, 1 year change +11.21%
- NASDAQ Composite Return: YTD change +8.28%, 1 year change +17.36%
- Russell 2000: YTD change +3.54%, 1 year change +12.03%
- S&P Midcap 400: YTD change +4.34%, 1 year change +11.30%
The VIX ended the month at 12.12 and the VXN ended at 14.59. The VIX finished July 6.11 points below June’s close while the VXN closed 4.75 points lower. These are both sizeable drops and highlight what a difference a handful of positive S&P and QQQ points can do to volatility. It’s hard to imagine we’ve heard the last of China’s woes and I expect volatility to pick up substantially again over the next couple of months.
The CBOE SKEW Index finished July at 124.20, 0.32 points above its June close. The SKEW continues to be tame still. That might not change until September when expectations of volatility should pick up.
I only had options on TLT left to expire today after rolling my July FEZ and SPY options yesterday. Both of the legs of my 10 TLT July $121/124 vertical call spread expired worthless and I logged a realized gain of $638.60 from the difference in the premiums I took in and paid out in mid-June. Since TLT didn’t make it above $121, I was never in jeopardy of being assigned the short calls. This lack of upward movement for TLT also meant that I didn’t need my hedge at $124. I’m still glad I had the hedge in place to keep me from worrying when TLT pushed as high as $120.56 last week.
I wanted to continue to sell TLT calls each month, but with the prices hanging below $120 still, I didn’t like the risks of another vertical spread and the August premiums weren’t rich enough for the strikes I was considering. I could see TLT push back towards $124 as it did in late May, so using a short strike of $120 to $122 could face an assignment. At the same time, while I think I’d have to hedge a low short strike, I don’t expect TLT to shoot above $125 in the near-term, which means a hedge at $124-125 might be a waste again. Instead, I decided to sell naked calls again and had to go out to September to get the premiums I wanted.
While TLT was trading at $118.44, I sold 10 TLT September $124 naked calls for $0.92 each and received $915.76 after paying $4.24 in commission. I thought about making this trade yesterday, but wanted to see how the 20-year Treasury ETF would open this morning. It’s been on steady push higher for a few days and I thought it would find resistance at the 50-day moving average. I waited until it looked like TLT was stalling under its 50-day moving average and then pulled the trigger. A few minutes later, TLT continued its ascent through its 50-day moving average. The delta on this contract is only around 23.0, so each dime in upward movement isn’t costing me much at all, but I could’ve done better.
I opted not to wait on my trade in case we had a quick reversal at the 50-day moving average. I figured if TLT continues to rise, I could sell another leg of short calls in the upper $120s in a few weeks or even late next month. I’m not nervous about being assigned TLT calls at $124 because I expect the ETF to be back in the $115-116 well before the end of the year. I’d almost like another option assignment on these calls so I could make more on the way down again. That said, I could use the same logic to target a lower strike, but I don’t need to take such a big risk when I’m selling naked calls. I’ll be happy to get an extra $900+ every other month if I can do it with somewhat reduce risk, especially since I still consider these TLT trades “gravy” on top of my other positions.
I just noticed that I haven’t made a trade in this account in nearly a month, since the June option expiration Friday. I didn’t believe it when I saw it and actually ran another activity download into Quicken to make sure I didn’t miss a trade. I knew I didn’t have much I wanted to update coming into the month, especially with prices down, but was still surprised by the realization. Anyway, I remedied that lack of activity today with two trades.
I started with SPY from an order I placed yesterday. I thought stocks could rise a little more by Friday and priced my limit order to hit on further strength. I missed the peak when my order hit within the first two minutes of trading. While SPY was trading at $211.75, I bought to close my one SPY July $215 put for $3.25 and sold to open one SPY September $215 put for $6.15. The calendar spread sold for $2.90 and I received $287.81 after paying $2.19 in commission. Late in the afternoon, it looks like I could’ve earned an extra $15 on the trade. It’s not much, but it all adds up.
This SPY put was part of a bigger trade I made on April 23, nearly three months ago. SPY was trading at $211.60 at the time, $0.15 below than when my order hit today and I sold the July put for $699.27 after commission. Closing it today gave me a realized profit of $373.18. The other two parts of the SPY trade I made at the time were buying a long SPY March $215 put and selling short a March $195 put. I’m down on paper by about $62 on the March 2016 combo so far and expect to lose more on it as I make up for it with today’s trade and other bullish trades. I sold the March spread for $712.20 and cut into that with today’s realized gain by $373.18, leaving me with $2,000 of insurance for a cost of $339.02. If my September put turns into a full profit, I’ll be ahead of the game and will have six months to trade against SPY with a $20 cushion on each share. I had no fear about selling the September put in the money since I knew I had it hedged for a ~10% correction.
SPY Naked Put Risk/Reward Breakdown
- Potential profit: $613.90
- Potential return: 2.94%, 16.26% annualized
- Breakeven price: $208.86
- Downside protection: 1.36%
- Recent high: $213.78 on 5/20/15
- Cushion from recent high: 2.30%
- Expected support: I’d like to see today’s low of $211.58 hold support since SPY gapped up to it, but won’t be surprised if July 13 low of $208.94 gets retested. July 13 is when SPY gapped higher by nearly a dollar just a few days ago. The intraday low on July 7 at $204.12 is the big line I’m going to watch. Not only was it support last week when the market reversed course, but it is also almost 4% below today’s intraday high, which is within the normal range for the current bull market cycle’s mini-corrections.
- Position close goal/limit: As I covered in my writing above, this put is hedged with a March 2016 calendar spread. That hedge gives me room to avoid worrying about a true correction of 10% on SPY. I could see major buying coming back in when we finally get the 10% monkey off our backs. Then again, I don’t know what’s going to cause a 10% correction, so my opinion could change if we get an unexpected macro-event.
My FEZ trade didn’t have a hedge mixed into it, so it was simply a calendar spread with no other backing. I sold the new put in the money too, mainly because it is only on two puts and FEZ could outperform for another couple of weeks if events in Greece calm down with their latest Band-Aid. While FEZ was trading at $39.12, I bought to close my two FEZ July $40 puts for $0.97 each and sold to open two FEZ November $40 puts for $2.37 each. I received $276.83 after paying $3.17 in commission for the $1.40 calendar spread. I would like to have had a shorter time before expiration, but the September puts aren’t available yet. I have nearly $50,000 scheduled for September expiration already anyway between my MDY and SPY puts, so it might be good that I spread it out further down the calendar.
FEZ was trading at $40.38 when I sold the July naked puts, $1.26 higher than it was when I made my trade today. The cool part, like with my SPY put above, is I made money even though the underlying ETF lost money. I only had a realized gain of $112.83 on these FEZ July puts, but that’s a lot better than losing $252 plus commission if I had bought the shares outright. This has been a fantastic year to sell options and I’m going to continue to use the same strategy until it stops working.
FEZ Naked Put Risk/Reward Breakdown
- Potential profit: $474.41
- Potential return: 6.28%, 17.83% annualized
- Breakeven price: $37.64
- Downside protection: 3.79%
- Recent high: $40.81 on 5/21/15
- Cushion from recent high: 7.77%
- Expected support: Today’s low was $39.03 and was right at the 50-day moving average as it gapped higher on the positive (not positive for Greeks) news. This low could be an area of potential support, but a retest down to the highs from earlier in the week, around $38.87 is likely too. The key support I’ll be watching closely is at $38.30, the low on July 10 when FEZ gapped higher by more than a dollar. The 20-day moving average is below that mark now, but has turned higher and could help provide support along with the 200-day moving average that is just above this area.
- Position close goal/limit: I’m using the same philosophy as I did when I sold the July puts I just closed out. I only sold two puts so I could take the assignment on weakness. I still don’t think Europe is about to fall off a cliff and want to hold onto the position on a dip that goes below my strike. FEZ had an intraday low of $35.13 last week and I admit to being a little nervous, but I didn’t panic and it worked out for me.
The chart below shows the daily prices for the past six months on SPY, an S&P 500 Index ETF, after closing the week at $207.31 on July 2, 2015.
SPY has traded in a fairly narrow ascending trading channel for the past five months. The range of the channel narrowed even more over the last three months, until last week when the large-cap ETF dropped to the bottom of the longer channel. Once again, the longer trend line of higher lows offered support for the index and stocks began to climb again.
The trend line of higher lows that started in February wasn’t the only indicator that came into play this week. The 200-day moving average coincided with the trend line to provide a second reason for the selling to stop. The 200-day moving average has been a solid line of support during the current bull market. SPY has only taken one trip below it since November 2012 and traders will be watching this line carefully to see if it can hold through the latest headlines again. Traders should keep an eye out for a close below the 200-day moving average and treat it as a bearish indicator.
Bears expect the three-month trend line of higher lows that was support to become resistance now that SPY has traded through it. Bolstering their case, SPY could not move above this line in either of the past two sessions. It is highly unlikely that this extremely narrow trading range from the past few days will last much longer. Debt issues in Greece and Puerto Rico or the upcoming corporate earnings announcements will push stocks sharply in one direction in the near-term.
The Williams %R indicator will give an early prediction on the new sentiment shift. Just as it did in March, Williams %R signaled the mini-correction in the second half of June too. For the first time in five months, all three time indicators fell into the oversold area in this past week’s slump. While getting there is bearish, coming out of this gray area is bullish. Traders need to be careful not to assume that one or two days above the gray area is enough. The move needs two or three confirmation days to validate the shift in sentiment and those days should not include a down day, as we saw on Friday.
Monday will be an important day of trading to see how the markets react to Greece’s vote on Sunday. Based on the media hype from most of last week, it shouldn’t take more than a day or two to decipher where stocks are headed. The opening reaction in the first 30 minutes of trading will not necessarily dictate the direction that will follow in the coming weeks. Traders will need to be cautious with their moves.
A rally from the lows might not have much room to run beyond the highs from May. Resistance should come into play around $215, near the top of the upper trend line of higher highs, only $8 above Thursday’s close. A bearish move has approximately the same room to fall. If the 200-day moving average and the longer trend line of higher lows breaks support, SPY could drop quickly to where support caught SPY throughout the winter months, around $198, only $9 below Thursday’s close. A decline of this magnitude would only give SPY a 7% retracement, still not a technical “correction” of 10%. Longer-term investors should ignore much of the noise surrounding Greece and concentrate on the value of their stocks as corporations release their latest earnings.
We reached the halfway point of the year in a weird spot. Stocks are basically flat for the year to date, but with some worrisome headlines messing with the mindset of investors. I don’t think the issues in Greece or Puerto Rico will be big enough to hurt the US stock market for more than a couple of months, if even that long. I’m extremely happy to be up as much as I am this year. (See the comparison of my account to the indexes below.) My account balance broke above $111,000 in June, but fell back over the last week or so to leave me with only a slight gain for June. Thanks to my out of the money options and my TLT trade, I didn’t lose money like all of the broad indexes did in June. I have a decent amount of time value and intrinsic value left to move in my favor over the next two and a half weeks before options expiration. At the same time, I’m fairly well set on my positions and don’t know how much trading I’ll have to do in the next few weeks.
I ended June with a Net Liquidation Value (NLV) of $109,769.30 and a Net Asset Value (NAV) of $109,706.26 according to Interactive Brokers (IB) after finishing May with an NLV of $109,008.95 . That gave me a gain of $760.35 (~0.7) on paper for June and a realized gain for the month of $3,236.03 on five closing trades. I didn’t pay or have to pay any in dividends since I closed my TLT short position in May. I did have to pay $24 in interest in June accrued from my short TLT position that ran through part of May. Quicken reported that I have $109,706.26, but that was after I deducted $0.03 from Quicken that appears to be from rounding errors over the past few months.
I only have four options set to expire in July and one of those is a long position that’s a hedge on my short TLT calls. Together, I have roughly $610 in time value left to erode and about $930 in intrinsic value I could gain on a solid rally. Obviously, my other later dated options could gain or lose more during this time too, but the July contracts will be my major focus in the near-term.
If all of my naked puts were assigned, I would be 89.62% invested in this account (94.00% without the spreads). At the end of June, I was invested 1.65 percentage points higher than I am now. The amount I’m invested is somewhat misleading. The percentage is correct, but since I have two positions hedged, I won’t incur losses on two of my IWM and one of my SPY puts until they fall close to 10%. In a shallow correction, my losses will be less than my percentage shows. In a bear market, my losses will be close to 95% of the market’s losses after that first ~10%.
This is my asset allocation in my IB account as of the end of June:
- Large-cap ETF: 17.76% (I accounted for my SPY March 2016 put spread within this)
- Mid-Cap ETFs: 25.05%
- Small-Cap ETF: 36.62% (I accounted for my IWM January 2016 put spread within this)
- International: 7.29%
- Individual Stocks & Other Sector ETFs: 8.65%
- Bonds: 0.0% (not including my TLT call spread)
- Short ETFs: 0.0%
These are my returns according to Quicken through June 30, 2015:
- YTD Return: +10.52%
- 1 Year Return: +15.21%
- Average Annual (not cumulative) Return since November 18, 2009 (when I opened my IB account): +9.25%
According to Morningstar, here’s how I compare to the major indexes (including dividends) through the month’s last trading day, June 30, 2015:
- Dow Jones Return: YTD change +0.03%, 1 year change +7.21%
- S&P 500 Return: YTD change +1.23%, 1 year change +7.42%
- NASDAQ Composite Return: YTD change +5.30%, 1 year change +13.13%
- Russell 2000: YTD change +4.75%, 1 year change +6.49%
- S&P Midcap 400: YTD change +4.20%, 1 year change +6.40%
The VIX ended the month at 18.23 and the VXN ended at 19.34. The VIX finished June 4.39 point above May’s close while the VXN closed 4.59 points higher. Both of these closing levels were a couple of points below the peaks hit a day earlier when stocks fell hard. Having the volatility metrics well above their lows will help those of us who sell options, but only if we’re willing to take the risks of a steeper decline in equity prices.
The CBOE SKEW Index finished June at 123.88, 1.38 points above its May close. I was actually surprised to see this relatively calm outlook mid-summer with so much uncertainty around the world. It helps to show what matters, the US economy is fine and won’t be brought down by Greece and Puerto Rico debt problems, probably.
I had another profitable options expiration in June. After making trades in each of the past three days, I added one more trade today to replace the only option contract I had not already dealt with earlier in the week. My only two sets of options left to expire today (10 TLT June $128 naked calls and one MDY June $275 naked put) finished the contract period worthless and left me with a full profit. I’ll keep the $842.06 I originally brought in on the TLT calls and will keep $789.64 I brought in on the MDY put.
TLT was trading at $123.40 when I sold the naked calls and finished the week just above $119.00 today (off its recent lows), which gave me a few weeks of not stressing over the trade. MDY was at $277.18 when I sold the naked put and was just below $280 at the close today. MDY dipped while I held it, but I never had a paper loss on the contract since it any weakness was quickly bought before the selling intensified. The next couple of weeks have a lot coming around from Greece that could shake the markets. I think any such sell-off will be temporary and will be a buying opportunity, so I decided to raise my strike on the new MDY naked put I sold.
While MDY was trading at $280.43, I sold one MDY September $280 naked put for $7.90 and received $789.74 after paying $0.26 in commission. I tried to get this order to hit yesterday at $7.70, but couldn’t find a buyer. Knowing that I wouldn’t be at my desk when the market opened this morning, I changed my order to $8.30 in case stocks fell at the open. They did fall, but mid-caps didn’t fall enough to bring MDY to my premium ask level. Late in the morning, I changed my order to $7.90 and changed my focus to work on other accounts. My updated order hit within 30 minutes.
I considered going for the $285 strike since I think MDY will finish the year above $285, but I decided to play it more conservatively due to my belief that MDY won’t run in a straight line to $285. I won’t be surprised if we see MDY at $276 before we see it at $285. I wasn’t confident enough with that prediction to avoid the trade I made today. I would rather have some “skin in the game” and weather a shallow pullback than miss the trade completely if MDY continues to inch higher.
MDY Naked Put Risk/Reward Breakdown
- Potential profit: $789.74
- Potential return: 2.90%, 11.52% annualized
- Breakeven price: $272.10
- Downside protection: 3.08%
- Recent high: $282.61 on 5/20/15
- Cushion from recent high: 3.65%
- Expected support: I was pretty close on my prediction for support last time I traded MDY. We’ll see if I can come through again. The 10-day moving average converged with the 20-day moving average today and is signaling a bullish indicator over the next few weeks. I could see MDY coming down to test these moving averages around $279 in the next few days before taking off to new highs. The 50-day moving average is around $278 and was support in March and most of April before breaking. The most important moving average now is the 100-day. It hasn’t broken support since January and should keep MDY above the $275.50 range, if it even gets that low. The 100-day moving average also coincides with a trend line of higher lows that goes back about a month and a half. I won’t even really blink an eye on MDY fluctuations until it’s below $275.50 and won’t truly worry unless it breaks below $268.00, where it bottomed intraday in March, coincidentally about 5% below the recent high.
- Position close goal/limit: I plan to let this contract run through expiration unless I can roll it for a good profit before then. I don’t plan to buy it back unless there’s a big change in the global economy. An event in Greece this month might not be enough to get me to exit, but probably not. I might buy a vertical put spread as a hedge at some point soon instead.