Calls are for the ES weekly options expiring Weds, Mar. 9
Tuesday, March 8
Overnight Tues. March 8 – trade calls
(on options expiring roughly 36 hours later).
If futures fall first to/near 4150-4112. buy 4200 or 4225 Calls
If futures bounce first to 4270 buy 4175-50-24 Puts.
During day session:
If ES price approaches 4260-70, buy 4100-4145 Puts
At open, buy 4145 Puts
Outcome – Tuesday
Overnight price touches 4140, trade is to buy 4225 Calls. But the price is around $20-$25, which is outside Nat’s normal price range, and relatively few members would take the trade at that price.(Red line on chart).
It provides a small profit until the open when Nat cancels the trade and recommends members buy the 4145 Put.
The first trade is essentially a wash, with a small profit or small loss depending on the execution.
At the time Nat recommends buying the 4145 Put, it is trading above $20, also outside Nat’s comfort level. (Black line on chart).
But as the market rallies into the end of the morning session, the price drops to Nat’s sweet spot, the $6-$10 range. The price whipsaws a bit in the afternoon session but eventually reaches ~$25 near the close..
It drops back to ~$15 overnight Tuesday, but the option still has about 20 hours to expiration and can be held.
Max. risk: $300-$500. Maximum profit: $950