Volatility Returns After Fed Leaves Traders Wanting More

Broader Market Weekly Performance:

Dow -0.98%

S&P -0.55%

Nasdaq +0.69%

Russell +1.07%

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MARKET UPDATE:

Another volatile week for markets ended with a relief rally on Friday; the relief rally was on the heels nasty declines on Thursday. There was a lot of anticipation heading into this week around the outcome of the Greek elections and the Fed's scheduled statement.

The Greek elections concluded as expected with the pro-bailout party winning. The Fed left traders a little disappointed since they did launch, or really even mention, QE3. As a result, traders threw a tantrum on Thursday like a kid not getting what he/she wanted driving markets lower all-day.

We expected the action that the markets gave us this week: A relief rally after the Greek elections and into the Fed statement followed by some rolling over later in the week. The large down move Thursday was more than we expected but was welcome as it gave our positions even more breathing room.

The July options cycle is a long one (5 weeks) so we have not been in any rush deploy new positions; we have plenty of time left in the cycle for our July trades.

Navigate wisely and stay profitable, my friends. Happy trading!

BOOKINGALPHA UPDATE:

Monthly Trading Service Commentary:

The Monthly Service closed a great June posting closed positions yielding a +10.53% gain for the month. This goes a long way to rebuilding after a tough start to the year. We have made some minor adjustments to our strategy which are paying off handsomely. we are very excited about the balance of the year.

We go into the coming week with only 1 Monthly Trading Service position scheduled for expiry on Friday 6/29 for an SPY Quarterly Iron Condor. The Monthly Service SPY position is in great shape heading into expiry and shouldn't require any adjustments. The July options cycle is a long one (5 weeks) so we have not been in any rush deploy new positions; we have plenty of time left in the cycle for our July trades.

While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility

Monthly Trading Service YTD vs S&P 500:

-7.63% YTD BookingAlpha Monthly Advisory

vs.

+6.05% YTD S&P 500

See Trading Record

Weekly Trading Service Commentary:

The Weekly Service trade entry criteria has been adjusted slightly to in response to the rough run lately and the heightened volatility in that markets.

We are using narrower width spreads (meaning they are 1-point wide vs. the typical 2-point wide structure) which allows us to position even further OTM. The skinnier spread widths results in higher commission costs due to more contracts being traded but risk is mitigated by moving further OTM. We would rather pay a little higher commission to provide us more safety with further OTM strikes than save some commission expense with higher risk lower strikes with 2-point wide trade structures.

As a result, the following trade expired Friday for full profit:

69/70/80/81 IWM Iron Condor expired for +13.6% in 8 days. This was on the heels of last week's expiring SPY Iron Condor for +9.89% in 7 days.

While losses are unfortunate, they are a part of trading. Looking at past trading years you will see drawdowns like this do occur and ultimately, how we prevailed. This is not a justification, merely a reminder that this situation is still within the realm of normal portfolio gyration. While it may be uncomfortable and is surely no fun, my position sizing allows for these drawdowns providing enough capital to recover. See past year's results and let them speak for themselves. For more information please read: Generating Alpha Comes With Volatility.

Weekly Trading Service YTD vs S&P 500:

-18.16% YTD BookingAlpha Weekly Advisory Portfolio

vs.

+6.05% YTD S&P 500

See Trading Record

Check out the BookingAlpha Trading Record

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