Still Bullish? Calls Are Good Choice Now $ES_F

Hurry up and wait.

That is what we used to say in the Eurodollar pit at the CME on FOMC days. These days an announcement from the Federal Reserve doesn’t carry as much trepidation, in my opinion. It’s hard to build up anticipation to an announcement when most observers feel 99% certain of the outcome. The Fed may have surprised the other 1% on Wednesday when they confirmed what most already expected, interest rates aren’t going anywhere.

The Fed also stated that it will maintain its current monetary policy of quantitative easing as the economy continues at a moderate pace. It will continue buying mortgage backed assets and Treasury securities. This continued program may give investors the confidence to continue their pursuit of the equity markets.

BUYS CALLS
I am expecting the bulls to continue to the upward push. Buying an out of the money call in the April E-Mini S&P 500 is one way to play a move higher. I am looking to buy the April E-Mini S&P 1570 call for 7 points ($350.00) or better. The April options expire on 4/19/13, so they have just under a month until expiration. In this instance, the risk would be $350.00 plus commission and fees on the trade. I am setting a target exit of 10 points from entry. In this instance the profit would be $500.00, minus all commissions and fees. Aggressive traders may want to stick around longer for a higher exit.

It’s that time of year again. Give your trade ideas more time than your bracket sheet. Survival is the key. You don’t want to get knocked early while the market keeps advancing.

RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES. A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.