Options trades, week of June 6, 2016

Last week (ES)

Week endingOpenHighLowClose
May 27, 20162053.252098.752041.252098.50
June 3, 20162100.002106.002082.752097.25

Commentary for last week

SP500 index moved back and forth around the 2093.50 line last week. It mainly held the price above 2085, but was unable to close above 2100 on a weekly basis. The narrow range move could result from a wait-and-see attitude as traders watch for hints from the Fed, following Friday’s dramatic miss in the Non-Farm payrolls.

Last week’s trades

160603-es-60a

ESM6 June 3, 2016. 60-minute bars.

Nothing to see here, folks. The holiday shortened the week, the volume was light, the weekly trading range was only 15 points.By the time the price reached our trigger levels for Calls, there was no time premium left to sell.

No trades. A good week to take a break.

This week:

Member content

 

Hi . Here is the member content for this week.

This week two events could influence the market. One is Fed Chair Mrs Yellen speaks at noon on Monday; the second is ECB president Mr. Draghi speaks early in the morning on Thursday. The Street will look for any hints from the Fed about the possibility of rate hike and for market reaction to the decision by the ECB to begin buying corporate bonds.

Calls:

Above the 2085 strike price, the 2100 and 2125-35 strike Calls have large (relative to other strikes) open interests. For the upside, we are watching first to see that the support at 2085 is not broken, and second, that the long term-resistance around 2100 is. In that case, the market could be pushed above 2110 and perhaps higher. Our system shows that the index and the ES shouldn’t close above 2160 level; therefore we look to sell Calls when the price moves above the 2105 level.

Puts:

Below the 2085 strike, the 2050, 2025 and 2000 strike Puts have relatively large open interests. Our system shows that index and ES shouldn’t close below 2020; therefore we look to sell Puts when the price goes below 2075.

Put/call volume ratio on SPX and ES June 10 option is 1:1 from 2150 to 2085 level, and 1:1 from 2085 to 1995 level.

Nat’s option trades for this week

ExpirationStrike price Sell options when ES price is
June 10, 20162145, 2155 calls above 2105
2135 calls
Meanline 2085
June 10, 20162025 putsbelow 2075
2000, 1990 puts

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