Option trades – week of Jan. 24, 2022

Friday Jan. 28

From the chat room

Naturus, 8:19 PM (Thurs closing call)

*option traders (EW4) Friday expiration. 4350 is meanline. While ES bounce under 4400 line, looking for 4300 puts to buy. while ES dip into under 4275 line, looking for 4350 call to buy. *
(**Overnight the 4300 Puts traded down to $10; the 4350 Calls traded at $5).

Naturus, 8:54 AM
4350 call popped from 8 to 10

Naturus, 9:11 AM
4350 call hit 14

Naturus, 9:23 AM
when ES goes up near overnight high area, lock profit of 4350 calls
right now profit already double from last night at $6 to $15 now
trailing stop should be at 8$ area

Naturus, 9:33 AM

ES opens at 4332.50
lock 4350 calls profit
looking for Next Monday 4015 put to buy

Naturus, 9:52 AM
Friday I don’t want to trade too much.. one call already made it. right now just focus on put side, try to get cheap puts to hold until next Monday.

Naturus, 11:13 AM
testing overnight high area
4350 call in the money

ESH22 Jan.28/22. 15-minute bars. Click to enlarge

Another wild day. The ES futures sold off overnight, and made a low just below 4270 as the Asian markets were closing.

Then it moved up sharply into the open, drew back a little, raced up, pulled back, and finally closed near the high of the day just below 4420.

The intraday range was about 150 points, which is quickly becoming the new normal for this market.  The options followed the price.

All the options expired at the close today, and anything not in the money at the close was worthless.

The 4300 Put traded down to $10 overnight and up to $48 in the pre-market session. As the open approached it traded at $35; by noon it was down to $2.50. Anyone who bought it overnight but did not exit before or during the morning session booked a loss.

The 4350 Put was equally volatile. It traded at $5 overnight, got up to $34 by 11 a.m., traded down to $5 again by 1:30 p.m. and closed the day deep in the money at $61.

Obviously how well you did on those options depended of how adroitly you managed your trades. The 4300 Put had a potential profit of about $1900 against a total risk of about $500. The 4350 Put had a potential profit of $2750 against a total risk of about $250.

But the price action in those Puts demonstrates one of the advantages of trading options as compared with trading the futures directly: they are easier to hang on to when the price starts whipping back and forth.

If you bought the 4350 Put for $250 you were more likely to hold on as the the premium dropped from $34 to $5, and you watched your paper profits melt away. If you were trading futures you risked going deeper under water as the price fell. Trading options, you couldn’t lose more than your initial investment.

And that may have been enough to keep you around for the big pay day at the end.


Thursday Jan. 27

From the chatroom

Naturus, 8:55 PM (Weds.)

option traders: EW4 (Friday’s option) overnight trading, if we see that ES goes back near 4275 area or lower to think about to buy 4350 or 4385 Call and if there is a bounce during overnight trading. ES price is under 4400, looking for 4150 put to buy (Friday option)

Naturus, 9:21 AM
get ready to sell 4350 and 4385 call
** (then trading around $65.25 and $43.50)

Naturus, 9:23 AM
4385 and 4350 calls all works
start to looking for buy a put
4250 put
**(then trading around $7.50)

4200 and 4150 puts are cheap. but little out of range. it could work tomorrow.
buying puts don’t need to be hurry. watching for ES how far it can go.

Naturus, 10:33 AM
4250 puts at 12.50, take some profit
rest puts should put a stop at 8$

Jerry, 11:27 AM
would you buy 4250 puts again here?

Naturus, 11:28 AM
still should buy it when it trades around 6$
this put mainly for this afternoon and overnight trading until tomorrow

4300 put is on watchlist.

Jerry, 11:32 AM
Also at ~$6?
Thx @Nat

Naturus, 11:35 AM
4250 puts if goes back 12.50, need to take some profit off.
current price for 4250 puts

Naturus, 12:42 AM
4250 put at 14 now
manage your trades carefully. I will be away from computer for a while.

Che, 13:55 AM
Looks to me like we could bounce from here. If you hold 4250 puts, now $19 lock some in. I may be early on this, but still good idea.

Nat, 14:05 AM
ES possible see today’s low. cover all ES short positions. also sell 4250 puts. today’s trading is done.

ESH22 Jan 27/22. 15-minute bars. Click to enlarge

Thursday saw a big drop in overnight trading, before the market slowly moved back up to make what became the high for the day around 4420 just before the open.

It was all down from there. THe market started selling off after a brief morning bounced and dropped below 4300 before recovering slightly into the close. The high-low range was >100 points every day this week.

Before the open Nat called an exit for the overnight trade, for subscribers who had bought the 4350 or 4385 Calls when the price dropped to the entry level overnight.

Almost immediately she initiated a new trade: buy the 4250 Put. At the time it was trading around $7.50.

The trades:

It was possible to enter the overnight trade for the 4350 Call at around $21; the high reached during the day session was $65.25; the same range for the 4385 Call was ~$18 to ~$43.50.

A reasonable trade on either would have cost an initial investment of about $1000, and had a finally payout of $2000 to $3500, for a potential net profit in the range of $1000 to $2500, depending on where you got in an where you got out.

The 4250 Put was trading between $6 and $7.50 when Nat posted a buy just before the open. It was trading around $19 – $22 near the low of the day, when Nat called the final exit. The initial cost of the trade was ~$350, and the final exit price was ~$1000, for a net potential profit of ~$750 per contract, before commissions.

Wednesday Jan. 26. FOMC day.

From the chatroom

Posted Tuesday evening:

Jan 26, mainly we have to look for how ES move. 4350 is option meanline. ES could move up to 4400 or higher up near 4450 area or could down to near 4212.75 -4200 zone.
Right now 4400 call and 4200 put remains on our buying list.

Jan 28, 4200 put should be in our watchlist. Right now it is expensive. wait for under under 10$ to buy.

Naturus, 9:04 AM

*4400 call is in the money*
need to lock profit
*buy 4300 put *

Naturus, 9:13 AM

4400 call should lock profit. it went from $18 to $41

Naturus, 9:20 AM

now i posted to buy 4300 put
when I posted it, it was 7.75-8$
4200 is out of range, but very cheap right now. it could work some profit after Fed announcement if ES retraces near 4300 area.

… after FOMC announcement

Naturus, 14:06 AM

4300 puts will not work at the end of day. should get off it.

Naturus, 15:02 PM

4350 puts are in the money
market gives a second chance to 4300 puts buyers to lock their profit
flying to $11

4400 call goes back down 1.50. I mentioned this morning to lock profit at 40. are we happy we did  it?

4325 puts are in the money.
4300 puts now $15

ESH22 Jan 26/22. 15-minue bars. Click to enlarge.

FOMC day is always marked by violent price swings, and today was no exception. Nat made calls on three options: the Jan. 26 4400 Call and 4300 Put, and the Jan. 28 (Fri.) 4200 Put.

We have to wait to see how her call on the Friday Put works out. (* The market moved away from that level and the 4200 Jan. 28 Puts traded for pennies, and never attained any substantial value. Probably no one executed that trade). 

But both her trades on today’s options made substantial profits.

The trade on the 4400 Call was posted overnight, when the option was priced at around $10.50. During the day session it traded above $55, and was selling around $40 when she posted the exit.

The total at risk could have been as low as $525. The value when sold could have been $2000, for a potential profit of about $1475.

When the trade on the Jan. 26 4300 Put was posted it traded around $8. When the market collapsed after the FOMC report came out those Puts were trading above $20 for a time.

The total amount at risk could have been as low as $400. The value when sold was likely around $15. The potential profit should have been around $350.

Tuesday Jan. 25

ESH22mJan. 25, 2022. 15-minue bars.

After the insane swings on the preceding Friday and Monday, on the day before the Fed Open Market Committee meeting the market was pretty sleepy.

Nat called the market as bearish after the failure to move above the 50-dMA on Monday, and sure enough it quietly sold off a little overnight.

There was a (comparatively) modest rally and sell-off in the afternoon session, followed by a close near the opening price.

Nat made a couple of minor calls in the morning session, but nothing substantial. There were no profitable trades to report.  .

Monday Jan. 24

Please read the disclaimer at the bottom of this page

From the chat room:

Naturus, 9:08 AM

This market just began first leg of bear market.
every bounce, we should look for buying put side.
4275 could be seen today

Option this week. E4A for Monday, E4C for Wednesday and E4W for Friday

today’s option is scalping trade
when price drops near 4300 and 4275, looking for 4360 call and 4350 call to buy, but don’t expect too much.

Naturus, 9:24 AM
Wednesday option (E4C), looking for 4250 puts to buy.

Naturus, 9:28 AM
Friday’s option (E4W), also looking for 4250 puts to buy.

Naturus, 12:48 AM
declining volume dry up
be prepared bounce.
put buyers start to take profit soon.

Naturus, 12:41 AM
ES could be its today’s low area
4213 could be low for today
see profit and take it.

*scalping long side with stop at 4208.50*

ESH22 Jan. 24, 2022. 15-minute bars

It was a wild day, the kind of massive rip down and rip up that is only seen perhaps once every five years.

The market, which was down dramatically on Friday, stayed relatively stable during overnight trading, but began slipping in the pre-market session and accelerated down immediately after the open.

By noon it had lost 200 points on the SP500 futures (ES).Then it turned on a dime and rocketed back up 210 points into the close.

That kind of intra-day volatility is like a license to print money for traders. Each point in the futures contract is worth $50, so the full move, up and down, had a profit potential of $20,000 per contract for intraday traders.

It’s doubtful that anyone got the full move. But lots of people took a good bite out of it, including Nat’s option traders.

For the first day of the week she gave her subscribers three options to trade, expiring Monday afternoon, Wednesday afternoon and Friday afternoon. By the time she called to the low for the day and initiated a long call, all of the options she recommended had made substantial profits.

For example she told her members to buy the 4250 Put expiring at the close Wednesday. At the time the Put was selling for about $7.50, and buyer had to risk $375.

By the time she called the exit on the trade, her members could sell the option back into the market for about $79, or $3950 total, for a net profit of about $3575. There were similar gains on the other options as well.

Not every subscriber got the full trade; but it was there for the taking. And all of them had the opportunity.

Total at risk:$375
Potential profit: $3575
Risk/Reward: 1:9