Last September 21st, CRI
issues an OnlyDoubles trading alert on Sugar #11
. Specifically, buying the October, 2014 $.20 call options at 46 cents or better. That translated to roughly $515.20 ($11.20/pt) plus commissions. Considering the time value alone I thought this was a good idea. Add in some realistic technical targets and this was a veritable 'no-brainer'. Those Calls initially zoomed higher and I was looking like a genius. However, the option price never did double so as the market slowly melted back down to our purchase price and then even lower, I was looking rather foolish. In very typical commodity fashion, this market had one more push lower up its sleeve. This is one specific reason why I like options trading rather then futures
or stocks. Since the premium paid is the maximum liability an option purchaser can incur, it really didn't matter if the price of the underlying went lower, I was more than happy to consider the $500 as the entire invested capital and whatever happens happens – October, 2014 was a very long way away. Indeed, that feature of options purchases seems to have paid off because prices of late have come storming back. So much so, that our long outstanding open order to sell half the position at double our purchase price (in this case $.92) was recently hit. Those that did do the trade should be sitting in a 'free' position. You should have sold half the position at that double level and have all your original $500 invested back in your hands. Who knows where the market will take Sugar
prices over the next six months but my hunch is somewhere above $.20.
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