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phil
January 22nd, 2014 at 1:54 pm

Fundamental Trading Webcast Recap (Replay available here):

We concentrated on Futures Trading yesterday and this will be a monthly feature in Future Webcasts.  It is our hope that you can add this valuable tool to your trader's toolbox!  

While we were doing the webcast, we literally made over $100 in less than 30 minutes of sample trading – that was just while we were demonstrating!  

In our 12/31 recap, we discussed trade ideas for AAPL and LGF – both have really taken off this week.  We also discussed puts on GOOG and WYNN that are not going so well but, of course, we also had our "5 Top Macro Trade Ideas for 2014" and those are off to a great start already, after just 3 weeks.  

While we are still "Cashy and Cautious", we are adding trades to our virtual portfolios and, at the moment (1pm on 1/21), our Short-Term Portfolio is down 0.4% ($400) and our Long-Term Portfolio is up 0.9% ($4,400) and we're still only using about 20% of our buying power, so plenty of time to start following as we have a very full year of trading ahead of us.  

In the Long-Term Portfolio, we discussed our ""5 Inflation Fighters Set to Fly " trade ideas and, of that group, we decided to go with:

• Buying 10 DBA 2015 $24/28 bull call spreads for $1.10 ($1,100) and selling 10 CAKE July $40 puts for $1.30 ($1,300) for a net $200 credit and what could be a $4,000 spread if DBA is at $28 or higher next January.  The possible gain on this spread is 2,100% and the net margin on the short puts is about $4,000 but, if all goes well – we only need the margin until July (assuming CAKE stays over $40 – and it's off to a good start today)!  
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We did not have a new trade for the Short-Term Portfolio but today oil hit our target of $96.50 and that does make us want to play it short:

• Buying 5 SCO (ultra-short oil) March $32/35 bull call spreads at $1.20 ($600) and selling 5 SCO March $32 puts for $1.30 ($650) is a net .10 ($50) credit on the spread.  The potential gain on this trade is $1,550 and, if that sounds amazing – it is!  This is why we want to teach you how to BE THE HOUSE – Not the Gambler!   The risk is being assigned 500 shares of SCO at net $32.90 ($16,450) but we would stop out of the trade long before that happens.  SCO is currently at $32.68 so we're essentially betting oil stays below $96.50 into mid-March.  
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We're leaving enough room on SCO to roll or double down should oil go back near $100 and drive SCO down to $30.  Keep in mind that, even if we are assigned 500 shares at $32.10 and SCO is at $30 – we're only down $2.10 per share ($1,050) – not so terrible.  People don't like selling puts because they fear being assigned, but that's all it is – not a big deal.  As we get more experience, you'll see it in action. 

Keep an eye out for Alerts and read our Macro Market Overview for other trade ideas during the week and follow us on Twitter for special PSW features, like yesterday morning's Futures trades that made $500 per contract on the Dow and $1,000 per contract on the Russell and with Oil.   That was just our morning!    

We don't track every trade but we do have plenty of great trade ideas all week and we have in-depth discussion of our strategies during the Weekly Webinars, which are always available for review at your leisure. 

Should we have any adjustments to our Portfolios, you can expect an Email like this one but, hopefully, we'll make plenty of money by just leaving them alone because we are – BEING THE HOUSE, Not the Gambler!  

All the best, 

– Phil