Happy Quadruple Witching Day!
Quadruple witching happens every quarter — it’s when stock index futures, stock index options, single stock futures and stock options expire on the same day.
Today marks the end of the third quarter, and the market rebalancing typically creates odd moves back and forth.
So please don’t put too much weight on what happens today.
This week in the markets has been all over…
We kicked off the week with a 12% move higher in oil after there was an attack on a major Saudi oil production plant and an oil field.
This attack sent the energy sector screaming higher and providing us nearly a 200% gain on our Transocean Limited (NYSE: RIG) Oct. 18, 2019, $6 calls.
After the market close that day, the New York Fed reacted to an emergency in the repo market by injecting $53 billion into the system.
Then on Wednesday afternoon, the FOMC announced another 25-basis-point rate cut and subtly announced plans to restart quantitative easing.
Despite all this and other weak economic data, the S&P 500 touched new all-time highs.
As I mentioned, we continue to see money rotate week to week like a hot potato.
However, when we follow our system for trading options and manage our risk before entry, we can weather any storm.
That is our game plan — we’ll stick to it.
Let’s talk about our newest positions for this week.
On Tuesday, we bought to open Toll Brothers Inc (NYSE: TOL) October 18, 2019, $41 calls up to $1.40 per contract.
Right now, we’re holding:
· Toll Brothers Inc (NYSE: TOL) October 18, 2019, $41 calls.
· Goodyear Tire & Rubber Co (NASDAQ: GT) November 1, 2019, $15 calls.
· Barrick Gold Corp (NYSE: GOLD) October 18, 2019, $22 calls.
As always, keep sending your questions and feedback to [email protected]
My team and I will have a new trade for you on Tuesday.
To your wealth, freedom and options!