In 2016, I read a new story that I thought would make a great trade idea. It seems that Lumber Liquidators had been publicly smeared by the mainstream program 60 Minutes. They claimed that Lumber Liquidators had distributed “cancer-causing” (!) floor materials. The stock was trading around $14, down from a high of around $120 two years prior. The State of California was setting its...
Let’s look at a recent winning trade I had. This trade was based on my interpretation of the CFTC’s Commitments of Traders report, the current futures curve and the historical futures curve surface available at tools.thetradersjourney.com. The Setup Based on the historical shape of the lean hogs futures curve, it seemed that the spread between the front months and back months was...
All, I wanted to post an example of how I like to trade futures options. I like to be long gamma, near expiration, where a relatively small move in the underlying instrument translates to big moves in the options price. Note that here I closed out the positions where there was nothing but time premium left. Returns for each trade were 400% win, 1,000% win and a 100% loss (with a...