Now we get the bullish break out! This is why we entered this trade to begin with. Normally I'd re-enter this trade long, but we've been experiencing several days of chop, and we're going into the weekend. Better to get confirmation we're still going up on Monday.
By bullish break out I mean we can see on today's chart:
Bullish Harami 2 candle pattern the last 2 days.
Break through the 20sma.
Close above the 8ema and 20sma.
Close more than half way up today's candle.
You might say wait a minute, we could see the last 2 day's candles before today. Yes, that's true but we couldn't rely on it due to the chop, and the 20sma was providing resistance.
So now that we have some bullish signals its time to sell the Put option we got as a hedge. I waited until the last possible minute to make sure the futures would close bullish, and at the same time give the market a chance to do some profit taking which would lower the futures price which would increase the Put option price. At 14:18:28 I sold the option for .135.
The loss on the Put option was .135-.40=-0.265*$600/pt=$-159.
Adding that to the loss on the futures (See "ZL Double Bottom Update 5"): $-159+$-228=$--387.
This trade is clearly a loss. But now it looks like the trade will go as originally planned. So, we'll revisit on Monday.
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