Thursday, June 29, 2006
The Decision!!
Well the Fed raised interest rates by 0.25% and U.S. stocks staged a major rally , with the Dow Jones Industrial Average surging 217 points, as the Federal Reserve statement was seen as signaling that the rate-tightening cycle is near.
If you compare this rally today to what happened last time the Fed raised rates then this just goes to show there is no rhyme nor reason to the markets!!
How did this affect us? Well the RUT finished up 26.28 at 714.32 and has smashed through our early warning review position. Tomorrow may well bring a sell off. Any gains tomorrow in the RUT will mean that I will close the position and we will replace the trade.
Until next time.
If you compare this rally today to what happened last time the Fed raised rates then this just goes to show there is no rhyme nor reason to the markets!!
How did this affect us? Well the RUT finished up 26.28 at 714.32 and has smashed through our early warning review position. Tomorrow may well bring a sell off. Any gains tomorrow in the RUT will mean that I will close the position and we will replace the trade.
Until next time.
# posted by Paul @ 4:10 PM
Wednesday, June 28, 2006
The Calm Before The Storm
Nothing to report today. The RUT finished up 1.10 to end on 688.04.
I decided to stay in this trade and watch carefully what the Fed says at 2.15pm EST. There was a chance to close the position for 1.40 but I declined to take it and want to see what happens tomorrow.
If there is seriously bad news then I will be out straight away. I will send an email as always but if you can just keep an eye on what the Fed say and see what the market reaction is like. If there are violent moves to the downside then think about getting out and taking a small loss.
If you are brave then keep the downside on until 650 or the upside 710. If either of these two prices are hit then close the position.
I don't know what will happen tomorrow but I am sure it is going to be interesting!!
Until next time.
I decided to stay in this trade and watch carefully what the Fed says at 2.15pm EST. There was a chance to close the position for 1.40 but I declined to take it and want to see what happens tomorrow.
If there is seriously bad news then I will be out straight away. I will send an email as always but if you can just keep an eye on what the Fed say and see what the market reaction is like. If there are violent moves to the downside then think about getting out and taking a small loss.
If you are brave then keep the downside on until 650 or the upside 710. If either of these two prices are hit then close the position.
I don't know what will happen tomorrow but I am sure it is going to be interesting!!
Until next time.
# posted by Paul @ 6:01 PM
Tuesday, June 27, 2006
The Nerves Are Setting In
France beat Spain 3-1 tonight in a great game of football in the World Cup. The Arsenal Boys were on top form and it was good to see Viera linking up with "Terry Henry" again!!
In the markets today there was pre interest rate panic and all the markets tanked!! Investors appeared to have ongoing worries that the Federal Reserve is about to raise interest rates too high and make a very serious mistake, killing off the economy and earnings.
So far throughout June, many investors have grown convinced that the Fed, under the leadership of Ben Bernanke, is fixated on combating inflation by raising rates and is somewhat indifferent to indications of economic slowing. This has led to real concerns that a 0.5% rise is coming and the markets do not like this!! Whatever happens on Thursday you can be sure it is going to cause some serious volatility.
We need to be aware.......a hurricane is coming and we don't want to be stuck in the middle of it!!
The RUT was down 11.80 today and finishing at 686.94 and this has relieved the pressure on our short 740 Call considerably.
However after today's move I am seriously considering shutting down this position, wait for the hurricane to pass us by, and then replace the trade. We are income traders and our first rule must be and is always capital preservation!!
I put my spread on for $1.70. I would hope that I will be able to get it off for $1.50 or better at some stage before the Fed announcement at 2.15pm EST on Thursday. I will keep this thought in my head, send an email to my subscribers warning them this is what I might do and see what tomorrow brings.
Until next time.
In the markets today there was pre interest rate panic and all the markets tanked!! Investors appeared to have ongoing worries that the Federal Reserve is about to raise interest rates too high and make a very serious mistake, killing off the economy and earnings.
So far throughout June, many investors have grown convinced that the Fed, under the leadership of Ben Bernanke, is fixated on combating inflation by raising rates and is somewhat indifferent to indications of economic slowing. This has led to real concerns that a 0.5% rise is coming and the markets do not like this!! Whatever happens on Thursday you can be sure it is going to cause some serious volatility.
We need to be aware.......a hurricane is coming and we don't want to be stuck in the middle of it!!
The RUT was down 11.80 today and finishing at 686.94 and this has relieved the pressure on our short 740 Call considerably.
However after today's move I am seriously considering shutting down this position, wait for the hurricane to pass us by, and then replace the trade. We are income traders and our first rule must be and is always capital preservation!!
I put my spread on for $1.70. I would hope that I will be able to get it off for $1.50 or better at some stage before the Fed announcement at 2.15pm EST on Thursday. I will keep this thought in my head, send an email to my subscribers warning them this is what I might do and see what tomorrow brings.
Until next time.
# posted by Paul @ 5:42 PM
Monday, June 26, 2006
The Waiting Game
Hi there Options Traders
I had a hectic weekend. Cousins wedding kept me busy most of the weekend and I felt slightly worse for wear this morning when I woke up!! Now I remember why I don't drink much anymore!!
Anyway, back to business. Not much happened in the markets today. U.S. stocks ended higher today as upbeat housing data and acquisition deals totaling around $90 billion helped distract investors from a looming Federal Reserve meeting on interest rates. Volume was light and that Fed meeting is on everybody's mind.
A rise seems certain. The question is will it be just a 0.25% rise or perhaps even a 0.5% rise and what will the Fed do in the future. If the Fed points to further concerns about inflation which require further rises then we could see some further heavy selling again so we must be prepared.
The RUT finished up again 8.5 points 6948.64. I am not concerned about the upward rise as I suspect the markets will drop after the Fed meeting. If the markets do drop they are going to drop hard so we may be glad for that extra down cushion. However I am not prepared to gamble on that outcome as the market will do what the market will do and we are not gamblers. Therefore my review point for this position of 710 remains. Once 710 is reached or passed I will see where we are and consider if any adjustments are needed.
Until next time.
I had a hectic weekend. Cousins wedding kept me busy most of the weekend and I felt slightly worse for wear this morning when I woke up!! Now I remember why I don't drink much anymore!!
Anyway, back to business. Not much happened in the markets today. U.S. stocks ended higher today as upbeat housing data and acquisition deals totaling around $90 billion helped distract investors from a looming Federal Reserve meeting on interest rates. Volume was light and that Fed meeting is on everybody's mind.
A rise seems certain. The question is will it be just a 0.25% rise or perhaps even a 0.5% rise and what will the Fed do in the future. If the Fed points to further concerns about inflation which require further rises then we could see some further heavy selling again so we must be prepared.
The RUT finished up again 8.5 points 6948.64. I am not concerned about the upward rise as I suspect the markets will drop after the Fed meeting. If the markets do drop they are going to drop hard so we may be glad for that extra down cushion. However I am not prepared to gamble on that outcome as the market will do what the market will do and we are not gamblers. Therefore my review point for this position of 710 remains. Once 710 is reached or passed I will see where we are and consider if any adjustments are needed.
Until next time.
# posted by Paul @ 5:49 PM
Thursday, June 22, 2006
Not much to report today. RUT finished the day 2.67 points down at 688 so all is well with our position.
It was rumoured today on CNBC that the Fed might raise interest rates by 0.5% rather than 0.25%. Yikes!!!! Lets hope not!!
It was rumoured today on CNBC that the Fed might raise interest rates by 0.5% rather than 0.25%. Yikes!!!! Lets hope not!!
# posted by Paul @ 4:24 PM
Wednesday, June 21, 2006
My First Entry
Welcome Easy Options Profits Traders to my Blog which has been prepared to assist you in your Options trading.
The Blog is here to assist you in using the Easy Options Profit System ("EOPS"). This Blog does not replace my weekly emails. You will still get these instructing you where we are on our trades.
The main reason for creating the Blog is because I have had lots of feedback from subscribers that want to understand more my thoughts on our positions on a daily basis and other financial events. I am painfully aware that not everybody wants to receive daily emails so I thought it would be a good idea to set up this Blog for all those who want to take advantage of it.
I will endeavour to enter on a regular basis my thoughts and views on the current trades we have on and any other issues or concerns you should be aware of. This is my first Blog so please bear with me as I get the hang of this "blogging" thing!!!
As you are no doubt aware at the moment it is a volatile period for the markets. All investors are nervous about what the Fed will be doing with interest rates on the 29th June. Another 0.25% rise seems a forgone conclusion but investors are waiting to see what clues will be given about whether there will be a pause in rate rises or whether inflation is still not controlled and further rate rises are required. If further rate rises are needed then expect some further increased volatility.
As you know extreme volatitlity in the markets is not something we like!!! Movement is fine as long as it is gentle!! For that reason I took the unsual move of just putting one trade on this month until we hear from the Fed on the 29th. Once we know what will happen re interest rates we can then place another trade.
The trade I placed was on the RUT index on 20 June 2006:
JUL 740/750 Call for 80c credit
JUL 620/610Put for 90c credit
I placed 12 contracts which gave me a total credit of about $2,040 after commissions. My margin is $12,000 which will give me a return of 17% for my 31 day position.
I will review the trade this week when the RUT hits 710 or 640.
I have however orders to close this trade if the RUT hits 720 or 635 in the next seven days at market price if for some reason it hits these points and I am not at my computer to monitor.
The markets had a good day today with the SPX up 12.08, DJIA up 104 and RUT up 13.17 to 690.07.
Keep an eye on the RUT over the next few days. Remember we will review our position when it hits 710.
Until next time.
The Blog is here to assist you in using the Easy Options Profit System ("EOPS"). This Blog does not replace my weekly emails. You will still get these instructing you where we are on our trades.
The main reason for creating the Blog is because I have had lots of feedback from subscribers that want to understand more my thoughts on our positions on a daily basis and other financial events. I am painfully aware that not everybody wants to receive daily emails so I thought it would be a good idea to set up this Blog for all those who want to take advantage of it.
I will endeavour to enter on a regular basis my thoughts and views on the current trades we have on and any other issues or concerns you should be aware of. This is my first Blog so please bear with me as I get the hang of this "blogging" thing!!!
As you are no doubt aware at the moment it is a volatile period for the markets. All investors are nervous about what the Fed will be doing with interest rates on the 29th June. Another 0.25% rise seems a forgone conclusion but investors are waiting to see what clues will be given about whether there will be a pause in rate rises or whether inflation is still not controlled and further rate rises are required. If further rate rises are needed then expect some further increased volatility.
As you know extreme volatitlity in the markets is not something we like!!! Movement is fine as long as it is gentle!! For that reason I took the unsual move of just putting one trade on this month until we hear from the Fed on the 29th. Once we know what will happen re interest rates we can then place another trade.
The trade I placed was on the RUT index on 20 June 2006:
JUL 740/750 Call for 80c credit
JUL 620/610Put for 90c credit
I placed 12 contracts which gave me a total credit of about $2,040 after commissions. My margin is $12,000 which will give me a return of 17% for my 31 day position.
I will review the trade this week when the RUT hits 710 or 640.
I have however orders to close this trade if the RUT hits 720 or 635 in the next seven days at market price if for some reason it hits these points and I am not at my computer to monitor.
The markets had a good day today with the SPX up 12.08, DJIA up 104 and RUT up 13.17 to 690.07.
Keep an eye on the RUT over the next few days. Remember we will review our position when it hits 710.
Until next time.
# posted by Paul @ 2:40 PM
