Hello!
I am going to keep this post short and sweet.
After my last post I bought another Gold at 1564.90 which brought my average price to 1573.40 ((1578+1564.90+1577.40)/3)
On Friday before I boarded my flight gold was at $1584.10 (up $10.70 from average price), I decided to take a profit. Although gold kept climbing throughout my flight I am happy with my decision to liquidate. It is a terrible feeling to stay in a position too long and pass up the opportunity to gain. You always win taking a profit. Here's how I can calculate the gains from this transaction:
(Settle price-purchase price) x tick yield = Profit
You would want to do this for every position
1584.10-1578 = 6.1 x 100 = $610
1584.10-1577.40= 6.70 x 100 = $670
1584.10-1564.90= 19.2 x 100 = $1920
__________________________________
Total Profit $3200.00
If you followed this pick you are $3200 richer! Not bad for a weeks work.
Remember when you BUY (long) a position you think the market is going to go up. When you SELL (sell) a position you think the market is going to go down. The person who sold me these three positions thought the price of gold was going to decrease. I thought it was going to increase, I was correct and sold them at profit to someone else who thought the market was going to go even higher.
That's all!
Brit
Monday, July 16, 2012
Thursday, July 12, 2012
July 11th, 2012
Hello everyone!
I just want to update you on my positions! Also give more
information regarding some of the terminology. I realize some of it may be a
little confusing so I am going to post a brief explanation of tick values! As
the quarter comes to a close companies will begin releasing their earnings. This
information can help you gain an edge, the further out you make a position the
better.
Let’s get started.
Gold:
I bought another gold contract at 1578, bringing my average
price to 1,577.70.
Crude Oil:
On Friday I faced a 2,087 loss after liquidating crude. The
same day I reestablished that position going long at $84.59. Today crude
rallied and sold both of my contracts at $85.60. Therefore after that position my loss went
from $2,087 to $67.00. If I would of stayed in a little longer I would have
realized a profit. I will continue to wait for another dip and probably up my
number of contracts. ($67 loser)
Ten Year Note:
I have 3 contracts short at 134’00 in the ten year note. My
original plan was to buy them back closer to the time of purchase but I decided
to change my plan of action and treat this more of an investment. (loser for
now)
I still have positions in GOOG and AAPL, although they have
dropped since Monday I definitely think GOOG is a buy.
Calculating a loss or
gain from tick value.
Each futures contract has a minimum price increment called tick size. For example crude oil has a
tick size of $.01 this basically means that crude moves in one-cent increments
you won’t see it moving $.011.
Information about tick size can be found at the www.cmegroup.com pick a contract and click
contract specifications. You will also need the contract size, which is the
number of units in the contract.
How to calculate dollar value of each tick:
Dollar value per tick
= contract size * tick size
Therefore, the dollar value per tick for crude is:
1,000 (barrels) *.01= $10.00, meaning for every cent that crude moves it is either a
$10.00 profit or loss.
Let’s apply this example to real life.
You buy crude oil at $82.30 about an hour later crude is UP
at $85.30.
In this example the change is $3.00, which is 300 cents (or
ticks), you would multiply 300*10 and you would have a profit of $3,000.00.
That’s all for now
Sunday, July 8, 2012
July 6th,2012
The estimates for the non-farm payroll were lower than
anticipated and unemployment remained at 8.2%... the markets reacted
accordingly the Dow closing under 124 points. Let’s go through the days positions.
Crude Oil-
I liquidated crude at 84.40 with a 2,087 loss but after some
additional research I reestablished the position. I bought 2 contracts in the crude oil, the
first at 84.65 and the second at 84.52 which brings me to an average price of
84.59. Adding to a position allows you to enter at different levels as opposed
to one price. If crude is dipping I would suggest a buy!
Apple-
I added to my apple
position buying more $625 calls at 11:08 am when the stock was trading at
603.83 settling at 606.25, which gives me a total of two positions in
Apple. This is an approximately a $1,500 winner. I am going to review some charts
this week.
Google
I decided to buy some Google positions in addition to Apple.
I bought the $625 calls when the stock was trading at 584.83; this was also a
$625 call.
Ten Year Note- Loser
Oh the ten year. I decided to add to my ten year position,
I’ve have three contracts short at 134’00, currently is 1,406 loser. Even
though this is currently a losing position and a lot of people would suggest
against adding to a losing position. I am confident in my decision.
Gold- The Winner!
I bought gold at 1577.40 settling at 1578.90, for every dime
gold moves it has a $10.00 tick value therefore this is a $1,500 winner. Are
you with me? Ended the day a happy girl! Even though I lost money in crude I
definitely reestablished myself with this position.
Google and Apple are both promising companies. It’s
important to remember that prices are based on the future of a company, a lot
of the information we are receiving now has already been factored into the
market. I think an important tip if you are interested in trading is looking
for an edge in the market. You want to be able to see various cause and effect
patterns and factor those into your decision.
For example the news of a new iPhone being released will not
have a profound effect on the price, Apple releases a new iPhone every year
that’s not an edge. However, finding out that Apple has ordered parts to start
making televisions is an edge that will effect the market. Keep this in mind when you are considering
the direction of a market or investing in different stocks.
I’ve been getting some questions about getting started with
trading, I think paper trading is a very good way to begin to understand the
markets. Sign up for a virtual trading account to get familiar with the
terminology and understanding your decisions without risking anything. Also
studying charts helps, cross-referencing charts and events for the company will
help you understand the future of the company.
Friday was definitely a tough market but I am comfortable
with my positions. Earnings will be released soon I will have some thoughts at that later this week. I have attached screen shots of my calls for proof… Be sure
to follow me on twitter @TheBritReport for the most up to date positions.
That’s all for today!
Brit
Friday, July 6, 2012
Thursday, July 5, 2012
July 5th 2012
Thoughts on Apple
AAPL is getting closer and closer to my $625 call… I made
this call when it was around 595 and it closed today at 609.94. Nice little
chunk of change I think it will go even higher tomorrow. Considering the news
of the new mini iPad (crossing fingers for a new iPhone) With the new non-farm
payroll we should see some upward movements in the markets hopefully in apple.
How does non-farm payroll effect the markets?
The payroll tells us how many people were hired, the higher the
better. The more people on payroll means more money being injected into the
economy. Which leads to more products being bought and sold. This could be great
news for crude, when the Dow is doing well crude tends to do well. A lot of
products are made from crude such as plastic and gas, when there is an increase
in these products it will increase the price of crude.
With that being said lets get into crude oil.
Just last week crude was at $77! Wow I would take advantage of drops in crude
I think it’s just going to build more and more momentum.
This afternoon I decided to go long in crude when it was at
$87.27 about .50 or .60 cents higher. My plan was to liquidate before market
close but I decided to hold it until tomorrow… market was kind of working
against me. I like crude because of the yield, every tick is 10 dollars. CHA
CHING!
Lastly the ten year
note -___-
TYU was actually up today… I went short at 133’270 and added
to my position at 134’00 giving me two positions total. Buy tomorrow, hopefully
at a profit.
That’s all for today!
Brit
Wednesday, July 4, 2012
Hello!
Hello all!
My name is Britney Holloway, I am a rising senior at
Michigan State University studying finance and hopefully after this fall
working on a minor in economics. I wanted to start a blog so I can keep track
of my calls and reference them in the future. I also wanted to shed some light
on commodity futures, people seem to be daunted by the idea of trading
especially commodities but it is really not as scary as it seems.
I want this to be an open forum
with discussion and questions. If you disagree tell me, if you think I’m
correct tell me why. I’m not professional just sharing my personal opinions and
research. I want to make it very clear that the statements expressed are opinions if you decide to follow my
calls I am not responsible for any monetary loss you may incur. Truth be told
if you lost money I’m probably losing money too!
Enough of that let’s get to the good stuff!
First off what are futures contracts?
According to investopedia a future is a contract obligating the buyer to purchase an asset or
seller to sell and asset ( ie physical commodity like crude oil or financial
instrument like a 10 year note) at a future date and price. Futures can be used
to either hedge or to speculate on the price movement of the asset.
What does that all mean?
Hedging is an
investment process to preserve values and help reduce risk.
Speculating is
picking the direction of the market you either expect the market to go up (go
long) or go down (go short)
Let’s put this in some real life terms.
Lets say I am a farmer ( long position) and I want to secure
the selling price of a crop at the same time an organic market (short position)
will want to secure a selling price to determine profits. I enter a futures contract to sell at 1,000
bushels at $5 in April. Futures contracts depend on the movements of the
market. If a week after the above scenario futures contracts drops $1.00 the
farmer loses a dollar and the organic market profits a dollar.
This is a really simplified description but as I make my
calls I’ll go into further detail.
Let me know if you have any questions!
Yesterday I made a call on ten-year notes, that’s what all
that mumbo jumbo below is. Basically I
expect TYU to go down which is why I went short. Interest rates are so low that
it makes more sense to invest in stocks as opposed to notes. When I made the
call TYU was at 133’70 by the end of the day it had dropped to about
133’20! Holla! TYU yields $31.25 a tic the bigger the order the more you
profit.
God Bless
Brit
Tuesday, July 3, 2012
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