Daily Summary – Tuesday Mar. 8, 2022

Calls are for the ES weekly options expiring Weds, Mar. 9

Tuesday, March 8

Transcript

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.

ESH22 candlesticks. Black line is 4145 Put. Red line is 4225 Call. Option price is left scale. Time stamps are Chicago time.

 

 

 

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