A lot of people enjoy riding a bike. Some people enjoy riding a bike in the mountains or a backwoods trail. Other people prefer to ride along the lakefront on a paved path. Each has their own set of risks. Some people like trading futures, other like trading options. Whichever your choice, be sure you are prepared for the risk involved.
The currency “war” is having a big trickle down effect on the markets worldwide. The ECB is maintaining low interest rates, and is even considering pumping up it current quantitative easing policy. Not to be forgotten on the European front is the little matter of Greece and debt. Will they make their payments? What will happen if they do or don’t? The only thing I’m sure as it relates to Greece and the Euro, is that I am not sure what will happen in either case.
Jobs Data
Friday we will get employment data here in the U.S., and it will draw everyone’s attention. Will the numbers be good enough for the Fed to lock in a rate hike in September? Or will we see revisions that give a less rosy picture of the second quarter so far? No matter what the numbers are, I expect some volatility and moves in the markets Friday morning.
E-mini trade
This week I am looking to collect some premium in the E-Mini S&P 500. I like selling the June E-Mini S&P 500 2075-2135 strangle at 20 points ($1000.00) or better. The June options expire on 6/19/15 so we have a little over two weeks to stay in the trade. By selling the 2075 put and the 2130 call at the same time,I am expecting the S&P 500 to trade between the two strikes over that time period. By collecting 20 points in premium, our break even point is 20 points outside the strike prices. If my hunch is right, and the S&P stays within the range, I am going to ride the trade all the way into expiration. If there is a strong market move, I would to keep a loss to 5 points or less.
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RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. 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. WHILE 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.
