All the major equities indexes have been trading in a range in the last month, with large and violent swings. We are looking forward to the time when the markets decide which way to go next. That’s when we’ll be able to use the cash reserves we’ve been keeping on hold since the end of last year, when we had the long term indication of the impending downturn that’s still underway. When a trend is established we’ll then be able to open new long term trades.
Fig. 1a - Mini-S&P monthly view
For now, however, given the high volatility of the market, this past week we continued focusing on short term trades. Let us review here what we did with the Q’s, our favorite NASDAQ100-related ETF.
Fig 1b - Q's Signals
We had two signals in the Q’s, the first on Monday, calling for a bearish trade that we executed with the November 32 Put, symbol QAVWF, and closed on Thursday. The second was a faster long trade we started on the November 30 Call, symbol QAVKB. The results are in the following table:
Fig. 1c - This week's results
Once again, we show what a $2,000 investment would have generated (see Note 1 below). In the first trade, we could buy 14 contracts at $140 each. The trade gave a fantastic 164% profit turning the initial $2k to $5,220. In the second trade 13 contracts could be bought. The trade had a great return at 82% profit. We closed the week with a great profit of $4,754 from the initial $2,000. The power of options.
Note 1 - The table shows what you could do with a $2,000 amount utilized each trade. We are not compounding or re-investing, we buy the number of contracts allowed by the opening option price.
