DailyPlay – Closing Trade (TLT) – August 25, 2022

Closing Trade

• TLT – 210.61% Gain: Sell to Close 3 Contracts Aug 26, 2022 $118.50/$114.50 Put Verticals @ $4.10 Credit. DailyPlay Portfolio: By Closing the remaining 3 Contracts, we will be receiving $1,230. We took Partial Profit on this trade on August 12 at $2.77 Credit, when we Closed 6 of the 12 Contracts, and then again, on August 19 at $2.74 Credit, when we closed 3 of the remaining 6 Contracts. Therefore, the average gain on this trade is 134.47% and the average cost basis to exit this trade is $3.10 Credit.

Investment Rationale

The SPX ended a 3-day slide yesterday with a gain of about 30 bps. as traders are starting to square some books before Fed Chair Powell’s statement on Friday from the Jackson Hole symposium. Bond yields pushed up to 3.11% (testing resistance from here to 3.14%), and then potentially as high as 3.30% if Powell’s words are taken even more hawkishly (this is not an official English word, but I’m fine using it) than expected.

TNX – Daily

We have one option spread that expires on Friday, so make sure you are out of them before then. This is the last 3 TLT long Aug. 26th $118.5/$114.5 put spreads that we are up 211% on.) 

Yesterday, I recommended a conditional long USO Sept. 16th $75/$81 call spread ONLY if the USO trades down to $75 or lower. I will extend that idea through Friday’s close, most especially with oil having traded to over $95 on Wednesday. (I want to buy it into the unfilled gap made this week if it gets a spike move down.)