Let’s take a look at how scan for any potential great SPY trades for this week. I am going to share how I look at what the SPY might move this week, an example of a trade to consider using a powerful indicator, and an update on a previous trade. Be sure to scroll down to make sure you don’t miss anything.
SPY, or the SPDR S&P 500 trust, is an exchange-traded fund that trades on the NYSE Arca under the symbol SPY. It’s an ETF covering companies traded within the SPX Exchange Traded Fund. It trades in high volume which is one of the reasons the Percentage Price Oscillator (PPO) indicator is effective when confirming direction.
I start looking at the previous trading day (in this case last Friday) to see what the S&P did in terms of price movement.
The image below is Friday’s price activity.
This chart image is courtesy of FINVIZ.com a free website and gives a quick view of each day’s movement.
Seeing that chart helps us know what to look for on the next chart that includes the PPO on the bottom of the chart. For more info on the PPO indicator, click here.
When we look at the PPO we are looking for places where the two lines cross. As we look at this example, we see the SPY moving up. The stock price in this example is $446.81. If the price rose to $452 you would make $5.19 per share.
If price continues to rise you could consider a Call trade if it moves above 447. The short-term target is $452.
If you were trading options and selected a 452 Call option strike, you would pay a premium of around $6.86 for the Sept 15th expiration, or $686 for the 100-share option contract. If the stock price moves to 452, the premium is apt to go up about $2.50. Your premium of $686 plus $250= $936 That is a profit of 36% over a short period of time.
This example shows how options can be a very effective way to control risk and maximize potential wins. We know what the premium is before we enter the trade and can determine if it is within our own individual risk tolerance. Using the leverage of options allows us to get the biggest potential return for a smaller initial investment.
Don’t stop here though, I want you to learn as much as possible. Here is a link to a video that tells more about options and how it helped me when I most needed it.
The time you put into learning to trade options will be very worthwhile. Stick with it and believe in yourself.
I wish you the very best,
Wendy
Previous Trades:
Last week we discussed buying 462 SPY calls. It did not reach our target entry price. No trade would be taken.
See Related Articles on TradeWinsDaily.com
Grabbing SPY Trades As The Bear Rumbles
Caterpillar Stock Becoming Constructive
That Signal Was Spot On-At Least 50% Win
Chart of the Day: Sunrun (RUN)
Will Marriott Stay Making New Highs
© 2023 Tradewins Publishing. All rights reserved. | Privacy Policy | Terms and Conditions | Contact Us
The information provided by the newsletters, trading, training and educational products related to various markets (collectively referred to as the "Services") is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by Wendy Kirkland a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. Past performance is not necessarily indicative of future results. Trading and investing involve substantial risk and is not appropriate for everyone. The actual profit results presented here may vary with the actual profit results presented in other Wendy Kirkland publications due to the different strategies and time frames presented in other publications. Trading on margin carries a high level of risk, and may not be suitable for all investors. Other than the refund policy detailed elsewhere, Wendy Kirkland does not make any guarantee or other promise as to any results that may be obtained from using the Services. Wendy Kirkland disclaims any and all liability for any investment or trading loss sustained by a subscriber. You should trade or invest only "risk capital" - money you can afford to lose. Trading stocks and stock options involves high risk and you can lose the entire principal amount invested or more. There is no guarantee that systems, indicators, or trading signals will result in profits or that they will not produce losses.
Some profit examples are based on hypothetical or simulated trading. This means the trades are not actual trades and instead are hypothetical trades based on real market prices at the time the recommendation is disseminated. No actual money is invested, nor are any trades executed. Hypothetical or simulated performance is not necessarily indicative of future results. Hypothetical performance results have many inherent limitations, some of which are described below. Also, the hypothetical results do not include the costs of subscriptions, commissions, or other fees. Because the trades underlying these examples have not actually been executed, the results may understate or overstate the impact of certain market factors, such as lack of liquidity. Wendy Kirkland makes no representations or warranties that any account will or is likely to achieve profits similar to those shown. No representation is being made that you will achieve profits or the same results as any person providing a testimonial. Testimonials relate to various other products offered by Wendy Kirkland and not the product offered here, but all of these products are based on Wendy Kirkland's system. Performance results of other products described in such testimonials may be materially different from results for the product being offered and may have been achieved before the product being offered was developed.
Results described in testimonials from other products or the product being offered may not be typical or representative of results achieved by other users of such products. No representation is being made that any of the persons who provide testimonials have continued to experience the same level of profitable trading after the date on which the testimonial was provided. In fact, such persons may have experienced losses immediately thereafter or may have experienced losses preceding the period of time referenced in the testimonial. No representation is being made that you will achieve profits or the same results as any person providing a testimonial. Wendy Kirkland's experiences are not typical. Wendy Kirkland is an experienced investor and your results will vary depending on risk tolerance, amount of risk capital utilized, size of trading position, willingness to follow the rules and other factors.
|
No comments:
Post a Comment