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