Options – week of Jan. 11, 2016

Last week

Week ofOpenHighLowClose
Dec. 28-152051.252075.002030.252035.75
Jan. 4-162037.752043.501910.001911.50

Commentary for last week

The SP500 index had the worst first week of the year in history. The price declined about 6.09% in a single week.

China was blamed as the cause of a broad market decline decline that spread around the world. But actually it is time for the bull market to have a correction after rallying for six years. The bus is too full.

Based on SPY closing price, we have a long-term selling signal. That means the Bear market is beginning.

Last week’s trades

ESH6 Jan. 8, 2016 60-minute bars

ESH6 Jan. 8, 2016 60-minute bars

Last week’s trades commanded unusually rich premiums, especially early in the week. Traders smelled a decline and were looking for Puts to hedge long positions.  We sold Puts with strikes at 1920 and 1900 at decent prices.

Friday afternoon we covered all our positions for a few pennies each, primarily because we we wanted to leave for the day and didn’t want to leave a position open.

It was a good break, because the 1920 Puts got caught in the late afternoon crash and ended up about 9 point in the money. But all our trades were profitable in the end.

This week

Member content

Sorry. This section includes the specific option trades Nat will be taking this week. It is reserved for paid subscribers.

You can get instant access by signing up now, during Nat’s once-a-year half-price sale. Costs $9 for two months. USE THIS LINK 

Comments are closed.