Trade Alert: UUP

By Stephen Leeb • January 16, 2018

Buy to open the PowerShares DB U.S. Dollar Index Bullish Fund (NYSE: UUP) June 15, 2018 $23 call option. Pay no more than $0.96.

Our dollar indicator suggests the greenback is oversold. A government shut down is unlikely. Even if it happens, it will be short-lived. More details to come in the upcoming weekly update.

In reference to our Three-Pot System, this is a Pot-One trade.

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Paul

Paul

Filled order at $0.96.

Rick

Rick

Filled at $0.92 on Fidelity

Gompps

Gompps

UUP 06/15/2018 23.00 C BTO @ 0.91 at Schwab

Derek Myers

Derek: Las Vegas, NV

Filled at $.92 debit.

Derek

Stanley

Stanley

UUP filled for .92 @ Fidelity

George McMillion

George McMillion

Filled at $.94 on TDA

Tap Tout

Tap Tout

As I understand the “Three Pot System”, we divide our investment funds into three equal amounts. We now have Pot 2 filled with CY. When that stock is sold, the proceeds will get invested in the next Pot 2 trade.
My question is how do we value the Call position of UUP. Do we use the cash in Pot 1 to buy call contracts as suggested? Do we buy contracts which control underlying stock that have a value equal to the value of Pot 1. Perhaps it makes sense to buy contracts where underlying stock value + contract costs = Pot 1 value.
Any suggestions?

Scott Chan

Scott Chan

Dear Tap Tout,

As far as Steve is concerned (and it’s the way that we are tracking performance for Aggressive Trader), pot 1 is now fully invested into the UUP June call option. If he has another trade recommendation while this UUP option trade is still open, it will likely go into pot 3.

Tap Tout

Tap Tout

I understand that Pot1 is now full. The question is how many call option contracts is equals the value of Pot 1. Assuming total capital directed to this system is $30,000 with $10,000 initially being assigned to each pot. We would now have about 555 shares of CY in Pot 2 ($10,000 market value). How many contracts of UUP will give a proper investment of Pot 1? 105 contracts would be at a cost of $10,000 but would have much greater potential for gain or loss than $10,000 of stock. A more similar investment would be 5 contracts of UUP where the underlying stock would be worth about $9,200.
Again, can you clarify the size of the investment in options compared to a similar investment in stock.

Rick

Rick

If you have $10,000 in POT 1 and you need to fully invest that in the UUP options, then you have to buy 105 contracts. It has much greater chance for gain or loss. The name of the service is Aggressive Trader.

Scott Chan

Scott Chan

Dear Tap Tout,

I am sorry if I wasn’t clear in answering your question before.

I said: “As far as Steve is concerned (and it’s the way that we are tracking performance for Aggressive Trader), pot 1 is now fully invested into the UUP June call option.”

What I mean is that pot 1 is invested into the option itself. In other words, the first scenario you mention in your post.

To be clear, that’s Steve’s own system and it’s a guide that our readers can follow at their own discretion. The approach of investing everything in the pot in the option is certainly high risk so we wouldn’t stop anyone from doing something to manage risk, such as the second scenario you mention.

We cannot comment specifically for what each reader should do, because that could be interpreted as money management, and we are not allowed do that in Aggressive Trader. We would suggest do whatever risk management method you are comfortable with.

MSNFL

Mukesh Narang

Filled at $0.87 debit

Stanley

Stanley

Good Morning,
Should I be concerned that the dollar is weakening.
With a new Fed chairman coming on board I am not sure where he stands on the dollar.?
Or if that matters.
I know we have until June and anything can change.
I am interested in your thoughts on this matter.
Thanks

Scott Chan

Scott Chan

Dear Stanley,

We’ve just put out a trade alert to close out of the UUP position. Unfortunately, the Treasury Secretary’s remarks hurt our trade and may pressure the dollar in the near term. We’ve decided not to fight City Hall.

Tim Lewis

Tim Lewis

ouch.. 29% loss

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