SPM-C S&P Micro Trend Trader Using Micro Option Collars to Define Risk

Trading micros with collars at this point isn’t cost effective, commissions and spreads we’re consuming too much of the gains. Once there is better liquidity in the underlying options we’ll give it another go but as of March 2021 we just can’t do any size.

To monitor the micro without collars see the EMA S&P Micro section 4 on this page symbol ET.

The Chicago Mercantile Exchange in August 2020 listed micro options on micro S&P futures enabling us to trade similar strategy to the S&P-C  program using contacts that are 1/10th the size ($5.00 per 1.00 versus $50.00 per 1.00). The major difference between this program and S&P-C  is that it uses larger profit objectives and stops.

Performance 7 September 2020 through February 2021

Recommended Starting Balance $12,500.00
Cumulative Net Profit
Maximum Drawdown

Performance is based on trading one $12,500 trading unit, never adding units and withdrawing all net profits annually. SPM-C uses leverage, has a realistic risk factor of $6,250 USD per unit if you are not in a position to comfortably assume this risk you should not participate in this program.

Risk Disclosure       Defining Account Risk

1) About the S&P Micro Contract

S&P Micro (MES), at the Chicago Mercantile Exchange
Each 1.00 change in price = $5.00
Contract value at 2,500 = $12,500.00

Micro Margin Requirement
= $1,200.00 USD
Charges on margin amount, less than 0.05% annually.

Restrictions on shorting = None

Trading hours = 23.5 hours per day, Sunday afternoon – Friday afternoon

2) Basics

This program is very  similar to S&P-C  the big difference is SPM-C trades longer-term using weekly EMA 9 & 18’s for trend identification rather the daily.

SPM-C trades with the long-term trend, long or short, adds to winning positions and collars up all trades to objectively define risk.

Long trades
2.01) If price action on this chart is above the red line. red is above blue = long.
2.02) Overall buy on this opinion link must be greater than 20%
2.03) Collar up the trade using micro weekly options
2.04) Risk, if red moves below blue exit the long trade.

Short trades
2.05) If price action on this chart is below the red line, red below blue = short.
2.06) Overall sell on this opinion link must be greater than 20%.
2.07) Collar up the trade using micro weekly options.
2.08) Risk on short positions, if red moves above blue exit the short trade

Current Weekly S&P Chart

For more on S&P collar trading see this link section 1

4) Educational

4.01) Basics of the Futures
4.02) Basics of Futures Options
4.03) S&P Educational Videos and Links
4.04) Introduction to Order Types
4.05) Detailed Description of Order Types With Examples
4.06) Understanding Futures Margin Requirements
4.07) Understanding Moving Averages
4.08) Understanding Support and Resistance
4.09) About Bollinger Bands & How to Set Them
4.10) Defining Trend, Trade Duration & Number of Contracts Traded
4.11) Explaining Call Options (Short and Long)
4.12) Explaining Put Options (Short and Long)
4.13) Option Collars
4.14) Working Examples of Collaring Positions and Potential Profit/Loss
4.15) 20 year chart of the S&P Priced in Gold
4.16) Test this strategy on any Bull or Bear market from 1983 to 2018
Test this strategy on any of these 17 related and unrelated markets
4.18) Quotes, charts and analysis for all 500 stocks
4.19) SEC filings & information for all 500 stocks

5) Program Structure and Account Opening Procedure

5.01) (ATA’s), What They Are and How They Work
5.02) The Fee Structure For This Program
.03) Defining Overall Risk For Your Account
.04) How Balances Are Guaranteed Plus or Minus Trading
.05) How To Open An Account

If you have any questions contact me.

Peter Knight


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Asset Investment Management

Family Office, Advisors