Monday, July 6, 2015

Binary Options S&P 500, Exit

Times are New York time.

I exited the positions before expiration for a near maximum loss.

S&P 500 (Nadex:US500) 10:51 a.m.: Long the >2068 strike for a $52.75 debit with the index price at $2076.23.
Exit 3:15 p.m.: For a $3.00 credit with the index price at $2,067.64.

S&P 500 (Nadex:US500) 10:51 a.m.: Long the >2065 strike for a $62.25 debit.
Exit 3:55 p.m.: For a $3.50 credit with  the index price at $2068.18.

S&P 500 (Nadex:US500) 10:52 a.m.: Long the >2062 strike for a $70.75 debit.
Exit 3:44 p.m.: For a $3l50 credit with the index price at $2,065.36

Results: Shares fell by 0.5% over 4 hours 47 minutes, or a -832% annual rate. the positions produced a $94.6% loss on debit, for a -173,653% annual rate.

Click on chart to enlarge.
SPX at 4:15 p.m., one day 5-minute bars
In the entry post, I wrote: "The price dropped immediately after I entered. Elliott wave analysis suggests that the present wave 2 {-3} will shortly reverse to the upside as wave 3 {-3}..."

That held true. However, the timing is such that the price stayed out of the money by the time expiration neared.

Tactically, I would have done best to exit immediately after one of my strike prices was crossed, which occurred 20 minutes after I entered the positions. I've marked that point with a red arrow.

My rule next time will be to exit immediately upon a contrary strike-price cross.

-- Tim Bovee, Portland, Oregon, July 6, 2015


My draft day-trading rules can be read here.

Elliott wave analysis tracks patterns in price movements. The principal practitioner of Elliott wave analysis is Robert Prechter at Elliott Wave International. His book, Elliott Wave Principle, is a must-read for people interested in this form of analysis, as is his most recent publication, Visual Guide to Elliott Wave Trading

Several web sites summarize Elliott wave theory, among them, InvestopediaStockCharts and Wikipedia.

See my post "Chart Analysis: Nomenclature" for an explanation of my method for labeling waves on the chart.


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Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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All content on Tim Bovee, Private Trader by Timothy K. Bovee is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Based on a work at s ss'ss

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