New Spread Trade in Financial ETF XLF

A new spread trade has been made in financial ETF XLF. A June 15th $28.00 call option and a June 15th $27.00 put option have been purchased. The cost of the trade was $0.70 before fees and commissions. The expectation for the trade is $1.50. Stop loss scenarios have been implemented. Some reasons for the trade are below.

- Financial stocks seem to be coiling.
- Rate raise likely will have some effect on the finance and bank stocks
- Geopolitical actions


** This blog is used for informational purposes only. It should not be used as a recommendation to buy or sell any security. Do your own due diligence before trading or investing. If you would like up to the moment communication on KDK Options trades, email at kdkoptions@gmail.com **

XLF Spread Trade Closed at Stop Loss

The XLF spread trade closed after it reached the stop loss level. Other reasons for the closure of the trade are below. Now on to the next trade!

- Time on trade less than 2 weeks

- Time value in trade higher than normal at this stage of option price to time remaining

- Hoping and wishing for an unlikely change in price due to my ego wanting to be right doesn't normally pan out to well ;). 


** This blog is used for informational purposes only. It should not be used as a recommendation to buy or sell any security. Do your own due diligence before trading or investing. If you would like up to the moment communication on KDK Options trades, email at kdkoptions@gmail.com **

Update on XLF Trade (Price Pin, more)

The current XLF trade is still being held.  The original post can be found here. With time a concern (expiration is 2 weeks away), the stop loss circumstance next week is likely and should be flushed out by Tuesday. XLF did seem to get pinned to $28.00.

Chart wise, the price is hitting short term support. The daily shows a flagging while the weekly shows a drop to support. The expectation (using option prices as an indicator) is that the ETF will likely move about 1-2% next week.







 


  ** This blog is used for informational purposes only. It should not be used as a recommendation to buy or sell any security. Do your own due diligence before trading or investing. If you would like up to the moment communication on KDK Options trades, email at kdkoptions@gmail.com **

Update on XLF Spread Trade (In The Money Call Side)

The call side of the current XLF spread trade is in the money. Contract popularity on the expiration price is $28.00 for the call and $27.50 for the put. KDK Options will continue the trade into next week. A link to the original post is here.

A closer watch on the trade is required with having stops in place as time is becoming more of an influence on the trade. The expiration on the trade is June 1st. The chart had a large positive green weekly gain after bouncing off the 50 day moving average. But it is up on the 20 day sma.

There is no expectation for news. The 10 year bond did hit 3% last week and Jaime Dimon did mention the expectation of a 4% rate coming soon.

Credit to ETrade for the chart.





 ** This blog is used for informational purposes only. It should not be used as a recommendation to buy or sell any security. Do your own due diligence before trading or investing. If you would like up to the moment communication on KDK Options trades, email at kdkoptions@gmail.com **

Update on XLF Spread Trade (Contract Popularity)

The spread trade for XLF is still active.We have not hit the stop loss amount and still feel that the market is volatile enough to move the position into reaching our targets

One item that KDK Options looks at when analyzing a possible trade is what the open interest looks like at the expiration date. For June 1st calls, the $27.50 call is carrying 9,000 contracts and the $28.00 call is carrying 2,500 open contracts. For June 1st Puts, the $27.50 contract is carrying the most at 2,100 contracts.

Knowing where the pressure is in terms of contract amounts can help getting the maximum likelihood of success on your trades.

** This blog is used for informational purposes only. It should not be used as a recommendation to buy or sell any security. Do your own due diligence before trading or investing. If you would like up to the moment communication on KDK Options trades, email at kdkoptions@gmail.com **