Markets I Trade: March 19, 2019

In my non-registered account, I am developing my trend following strategy continuously. I don’t pretend to have all the answers. I am sharing this ongoing learning journey with you in this series.

I am always exploring new ways of trading, new markets to access, and better control of risk and opportunities. My main goal is to avoid large losses while achieving reasonable returns over time. I try to focus on trades which I believe have good reward-to-risk ratios.

You will see me trade index products, currencies, and commodities primarily with futures contracts and LEAPS options for maximum capital efficiency. I try risk small amounts of capital with each trade targeting high return multiples on that risk.

One thing that is easy to notice is most weeks have no action and trading is quite boring. The equity based positions move in relative tandem. Volatility positions are the only place where exciting things seem to happen more frequently.

*Information on this post is dated at market close, Friday, March 15, 2019.

IWM: LEAPS Options

Source: StockCharts.com

I purchased IWM $160 call options on January 15, 2019 when IWM was trading at approximately $143 per unit. IWM is again moving higher over the past week, but has not hit new highs in my holding period. I am looking for the price to push past the recent high of $159 before I raise my stop.

EEM: LEAPS Options

Source: StockCharts.com

I purchased EEM $45 call options on January 15, 2019 when EEM was trading at approximately $40.50 per unit. EEM has moved up in price since my purchase and my stop is set at at $40.10. Since the lower low on March 8 I'm watching this position carefully. It is moving up again so I'm looking for a new higher high to relax my attention.

EWZ: LEAPS Options

Source: StockCharts.com

I purchased EWZ $50 call options on January 25, 2019 when EWZ was trading at approximately $44 per unit. My stop level is at about $40 and EWZ is in long-term overbought territory. Using long-term metrics, positions can be overbought for much of an uptrend. It can be a sign of optimism rather than extreme optimism.

KWEB: LEAPS Options

Source: StockCharts.com

I purchased KWEB $50 call options on February 20, 2019 when KWEB was trading at approximately $45.10 per unit. My current stop is set at $42.20. So far, KWEB has made higher highs and higher lows in a steady pattern since late December 2018.

DXJ: LEAPS Options

Source: StockCharts.com

I purchased DXJ $55 call options on February 22, 2019 when DXJ was trading a little under $51 per unit. I'm holding my stop at $47.60 per unit until we see a push over the $51.50 level.

VXXB: Options

Source: StockCharts.com

On March 11, I purchased in-the-money VXXB $50 put options when VXXB was trading at approximately $31.25 per unit. This trade is currently in profit.

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