September 25, 2016
The Fed met last week with the eyes of the trading world on them. As widely expected, they did nothing…as did Eurodollars…closing on Friday at exactly the same price as week earlier.
BUT, put options got dramatically cheaper…thereby sharply increasing the leverage in the June 2017 9887 Puts I continue to recommend.
This graph shows the changes in values of the June 2017 put I am currently buying…
This is obviously a very short term view but this option certainly could quickly jump back up to 10 or 11…or go lower…But, I am buying this put with the idea Eurodollars will go to 98.50 or 98.25, meaning this option would be worth 37 ticks ($925) or 62 ticks ($1550) respectively.
Here is another way to look at this…
I will keep saying it. I have never seen a trade like this…
INTEREST RATES ARE NOT STAYING LOW. THEY ARE ALREADY ON THEIR WAY BACK UP…AND THAT IS WHAT THIS BET IS ABOUT…
Call me if you think I am making sense…and if you think the risk is worth it…
All option prices in this newsletter include all fees and commissions.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Eurodollars