SPX Hedge Trade Update #1
Good day Insiders,
Well, that didn’t take long! I really was not expected to have a 600 point drop the second trading day of the new year, especially when you consider the fact the market had a fairly good bounce yesterday off the lows and managed to close ever slightly in the green. Recall the hedge we placed yesterday, it is time for us to hedge part of the risk off in the market has moved in our favour and may indeed be time to place a new hedge moving forward. I am still of the opinion this market is in for lower lows then seen in December 2018, we just don’t know when that’s going to happen. My opinion is that we will see further consolidation and likely some sort of a relief bounce leading up to the trade talks with China and potentially a dovish Fed tomorrow. It is with this opinion that we will take part of the risk off the table, just in case that bounce does take place, or President Trump gets trigger happy with Twitter.
By only selling 5 contracts of the 2350/2330, this brings in $2125 of our risk while still leaving greater profit potential in case we head lower.
Risk & Reward
As illustrated below, we have great profit potential and time on our side for the market to decide where it wants to go.