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  

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