03 March 2020 TUESDAY newsletter/comments

Greetings: 03 March 2020 TUESDAY:

Closing Trade:  I made a closing purchase of the short 65-strike MAY20 CALL for 0.04.  This option was sold back on 11th FEB 2020 for 0.10 ($100) and it was closed at 0.04 ($40) for a profit of (+$60).

New Trade today:  I sold a JUN20 60-strike CALL for 0.31 this morning for a credit of $310.

My positions now are: short the MAY20 Crude Oil 37-strike at 0.15,  and short the JUN20 60-strike  CALL @ 0.31.  The MAY20 37 PUT expires in 44 days on  04APR20  , and the JUN20 60-strike CALL expires in 72 days on 05MAY20.

The JUN20 60-CALL Prob OTM = 93%

Here a link to the original trade on FEB 11, 2020:

Back on 11th FEB 2020: I sold a MAY20 Crude Oil short strangle.  I sold the 65-strike CALL for 0.10 ($100) and I sold the 37-strike PUT for 0.15 ($150) for a total premium credit of $250.   You can see the details by clicking the TRADE ORIGINATION banner below:

Current Crude Oil Chart (this is of the JUNE 2020 futures):

Comments:  The IV%, implied volatility of all the options are of course high right now, which is a good thing for option sellers.  The Corona virus threat(s) are not over.  The FEDS lower rates .50 today in an attempt to counter the poor economic expectations over the next few months.  Almost a certainty that more volatility is ahead.

Gold prices slid down from recent highs near 1700 but have bounced up today by $52 at midday.  If there is another high near the recent high of $1697 (basis the JUN20 futures), I might, since IV% is high, sell a CALL up near $1800 if possible.  I’ll be shopping for that.

There is talk by medical professionals that the Corona may be like flu in that warmer weather will drastically reduce its spread.  I also looked and in the Southern Hemisphere, where it’s warm now, there ARE relatively few cases.  If this is true, and we just don’t know yet —- the Corona spread could peak and subside with warmer weather.  I felt good selling the 60-strike today not just because of expected weaker demand but also the fact that inventories are already high and will climb more it seems.

Chinese treaty purchases for USA grains are too tentative for me to sell options there.    Option Sellers must be cautious with all the uncertainty and high volatility in the market at this time.  That is why I have fewer trades on than usual, and it could stay that way for a while.  Still, I continue shopping for opportunities.  Have a great week and thank you. – Don

Don A. Singletary

Have any interest in day trading the new Micro E-mini stock index futures?  If so, please consider my new book on the subject available on Amazon:  (read more at this link)

You can now day trade the new Micro E-Mini stock index futures with only a $200 margin*.

Free prime shipping on Amazon



*TastyWorks:  $2,500 minimum.   Easy online application, free ACH money transfers.
Read more about TastyWorks at this link please: http://daytradingmicros.com/brokers/



For more info on these books available w/ free prime shipping, please touch or click the cover photo. thanks.




The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of  the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk.   Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and  use of stops or lack thereof.  This is not a trade advisory service and is for educational purposes only.  The content on the pages here is believed to be reliable - but we cannot guarantee it.