Speculative - Long XHB on breakout
Several stocks and indices are showing buy signals and I’m working on my timing. Ideally, as a full time trader I want to my futures and directional trades to cover my income and use my options trading for wealth building. Well, one of my ETFs broke out today… XHB. Take a look at this chart:
Just before 10am it set a high of day (HOD) and then retraced. After 2pm, post fed announcement and the major markets were still holding up I went looking for something breaking out. Once this closed above the previous HOD I went long buying a Sep 15 call for 3.40. Based on tomorrow’s action I will likely go ahead and sell the Aug 19 call for +.40 bringing my cost basis down to $3.00. If it closes above 19 for August I will make a 25% ROI in 9 days.
Mojo
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Mojo
I think I am finally getting it. Is it true all/most your positions are covered?
eric
This trade has worked out nicely!
Mojo