Tuesday, August 24, 2010

OnlyDoubles Profit Spotlight for August 24th, 2010

Hello and welcome back to CRI's OnlyDoubles Profit Spotlight.

Here you will find past OnlyDoubles trades that have been recently closed. This blog's purpose is to update the public on recently completed OnlyDoubles trades as a demonstration of the model and a teaser to get you to subscribe. If you would like to learn more or subscribe (for real time access to new OnlyDoubles trade ideas) please visit our Subscription page.

The final week of the 2010 summer has given us a treate in the form of a double in our Feeder Cattle position.

Feeder Cattle (CME)

The image above is a chart of the January 2010 Feeder Cattle futures contract traded on the CME. As well, I have superimposed a few of the closing option quotes for August 24th.

For those new to trading, anytime a contract breaks out of the chart pattern you see here, it is very bullish. Copy it and keep it for your records. I don't care, a fact is a fact...Not surprising then, prices have move up very aggressivly. So much so, that our 118 calls are trading like the market is closer to 121 (based purly on intrisic value) and yet the market is still well out-of-the-money at 117.

Recently, subscribers to CRI's OnlyDoubles newsletter service were suggested to take a position in the January 118 Feeder Cattle Call Options at or near 1.50 points (point A.). I myself was able to buy at 1.20 points. As you can see, these options settled well above 3.00 today.

As a general rule of thumb, one ought to sell at least half their position in any market should it double in value. Since I myself was only able to buy one, I have cleaned the position out at a more than comforable double to my 1.20 entry. Should we get a pullback in price (maybe to fill the noticable gap at 113 & 115) I might re-enter the trade....

For the time being I'm more than happy to sit on yet another double....

...speaking of trades....do you know which market CRI's OnlyDoubles is trying to take a position in right now? Seems to me it's worth $100/year subscription to find out....

That's all for this issue of CRI's OnlyDoubles,
Brian Beamish FCSI