But since it’s out, here were the two trades – both profitable by 45% and 65% gains respectively:
1) Buy to open 15 VXX MAR 17 ’17 17 put at around .85
2) Buy to open 6 IWM Mar 03 ’17 139 Call at
To the right is a screenshot of what members saw on their Whatsapp list.
We initiated the VXX short when VXX was @ 17.57 — it ended the day at 16.66.
Today we exited half of our VXX shorts around 16.8. – so the VXX puts we bought at .83-.85 – went up almost 50% when we exited at around 1.2.
So $1,250 became around $1,750 – when we exited half — so of the unrealized $500 at that time, we realized about $250.
My expectation was that VXX would continue to go down if the S&P were to go up — but today was one of those rare days when the S&P went up but Volatility also went up. So VXX weirdly closed above 17.3. Taking half profits on a big move like this is always a good idea just in case.
So we exited half of our position at 1.22.
Meanwhile, if you took the IWM call trade purchase at 1.35 — well, that call is now 2.1 — so up some 65% or so so far. Since this was a small position – we only risked $880 — and that $880 is now $1,280 – for about $400 gain so far.
I’ll try to avoid sending alerts to the wrong email list going foward, but since it’s out there, I might as well post it.
I have to admit this rally in all indices has gone far beyond what I expected. I’m kicking myself for exiting the SPY trade when ES was at 2305.
While we did enter with VXX puts – the volatility contango did not sustain today as I thought it would be. Still in positive territory, but I thought that trade would be more effective then doing a SPY call, which it usually is – though this time it wasn’t as effective.
However, we did manage to hold onto our IWM call trade – which is nicely profitable on a percentage basis. Will have to put bigger size on these trades that turn out well.
Today the market was “supposed” to drop – but since it didn’t – extensions were formed – and it looks like we may consolidate in the mid 2340s overnight before attacking the upper 2350s tomorrow.
Russell is setup to go towards 1410 – after consolidating between 1340 and 1390 for months and months. The setup is there let’s see if the market follows through. Support is in the 1398 region.
Based on this chart – we expected a pullback to 2320 ES – which did happen – that’s when we entered our VXX put.
From there, the market just ripped up – and is now at 2350ES.
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