Last week
| Week ending | Open | High | Low | Close | Volume (million) |
|---|---|---|---|---|---|
| Aug. 5, 2016 | 2174.00 | 2178.50 | 2140.50 | 2177.50 | 7.9 |
| Aug. 12, 2016 | 2176.00 | 2185.25 | 2167.75 | 2181.25 | 6.2 |
Commentary for last week
SP500 index moved sideways and had the narrowest weekly range since Sept 2014. Even though it made all-time highs last Thursday, the lack of momentum carries a caution sign.
Last week’s trades
ESU6 Aug. 12, 2016. 60-minute bars.
No option trades this week. The 18-point weekly range was not enough to generate the “irrational enthusiasm” that makes for profitable option sales.
Nat’s trigger prices were not reached and we stood aside.
This week:
Member content
This section contains the detailed option trades for this week. It is reserved for paid subscribers.
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[/MM_Member_Decision] [MM_Member_Decision membershipId=’2|3|4|5′]Hi [MM_Member_Data name=’firstname’]. Here are the option trades for this week.
This week is a major August expiration week. There are three options expiring on different days. The S&P 500 two index options expire on Aug. 17 and 18, and ES option expires on Aug. 19. External news will help to move the market price to go either direction. At the meantions, overbought may be due for a pullback.
Calls:
Above 2185 strike price, There are large Calls contracts bought at 2200 and 2220 levels. Index could struggle to move up there if 2170-65 zone is holding up. But upside is limited. Our system shows that index and ES shouldn’t close above 2235 level, therefore we look to sell Calls when price goes to the 2190 area.
Puts:
Under 2185 strike price, the 2150-40 strike Puts have large open interests. It indicates that index may pullback near that 2150-40 zone for testing. But heavy selling could be triggered if the price moves under 2125 level and closes below it. Our system shows that index and ES shouldn’t close below 2125 level, therefore we look for sell Puts the price goes under 2150.
Put/call volume ratio on SPX and ES Aug. 19 option is 1:1 from 2225 to 2150 level, and 3:1 from 2150 to 2050 level.
Nat’s option trades for this week
| Expiration | Strike price | Sell options when ES price is |
|---|---|---|
| Aug. 19, 2016 | 2220, 2225 calls | around 2190 |
| 2210 calls | ||
| Meanline | 2185 | |
| Aug. 19, 2016 | 2100 puts | around 2150 |
| 2090 , 2075 puts |