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Thursday, 3 September 13:10 (GMT -05:00)



Foreign exchange market

Options: Introduction To Trading Horizontal Spreads On Seasonality

Options: Introduction To Trading Horizontal Spreads On Seasonality

 

 

In the previous article we told you about the idea of trading options on commodity futures with the help of calendar strategies. In brief, commodity futures are influenced by seasonal factors.
 

 

 

 

 

 

However, using calendar spreads in futures trading is attended with the same unpleasant issues like the necessity to trade the given asset directly, with placing stop-loss orders etc.
 
Fortunately, we came up with the idea of trading options instead of futures. Indeed, trading options with the help of calendar strategies is another story as compared to futures spreads. Moreover, some positive factors connected with seasonality can be inherited by option trading strategies, i.e. seasonal appreciation of one contract against the other, which gives option spreads another competitive edge. Once the seasonal factors fail, we are defended by time decay, which is profitable in this case.
 
So, last time we (the Option Trading Department of Masterforex-V Academy) traded corn: a June option was sold while an August option was bought.
 
Let’s monitor the trade. The plan hasn’t worked so far as the seasonal downtrend is delayed (it should have started in early March).

 

 

 

 

The chart above indicates that the spread price has gone 10 points (or $500) up from the entry level.   Now let’s have a look at the riskrofile of our calendar spread (it consists of 4 sold and 4 purchased options):

 

 

 

 

 The paper loss is $200. Why is it a paper loss? If the price stays at this point at expiration, we will get some $2000 as a reward. If the seasonality does work, we will earn extra money.

 

 

 

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Forex: GBPUSD

 

The UK’s manufacturing sector seems to have seen an activity slowdown in August. This is confirmed by the latest joint report published by Markit and CIPS. The analysts say that the service sector and domestic consumption are still playing the key role in the British economy.

Publication date: 03 September 06:09 AM

Masterforex-V EXPO Names Best FX Banks in August 2015

 

Any Forex trader sooner or later faces the challenge of choosing a broker.  This is a major choice, which is going to determine the trader’s overall success along with a successful trading strategy, solid risk management, a clear trading plan and some other factors.
Publication date: 02 September 08:45 AM

Masterforex-V EXPO Reveals Best Binary Brokers in August 2015

 

Since the very time binary options were recognized as a finial asset (a derivative, to be more exact), they have been getting more and more popular with Forex, commodity and stock traders worldwide. As you know, binary options are mostly all-or-nothing bets, financial derivatives allowing you to know your risk and potential reward in advance and therefore plan your trading accordingly. Make a correct prediction and profit if the option is in the money on expiration. It is that simple. Indeed, the relative simplicity is one of the key reason why binary options are so popular with contemporary traders, especially for those FX traders who are just getting their feet wet and have little to zero expertise in trading currencies. Binary options are way easier to trade than the conventional spot Forex market. This is an excellent opportunity gain some experience. Still, intermediate and advanced traders (especially intraday traders) do not mind trading binary options as well since they can be potentially more profitable.
Publication date: 02 September 06:43 AM

Masterforex-V EXPO Names World’s Most Reliable FX Broker in August 2015

 

It is common knowledge that no retail Forex trader can do without an FX broker. With that said, every single trader out there has to choose a certain broker to go with.  Still, few traders are actually happy about their choices since not all FX brokers are reputable companies that a worth trusting.  Few brokers can actually put their promises into practice. Decent trading conditions, safety of client funds, transparency, flexibility and innovation. These are some of the things that a reputable Forex broker should provide its client with.
 
Publication date: 01 September 11:06 AM

Masterforex-V EXPO Reveals Best FX Rebate Services in August 2015

 

For starters, let’s find out what rebate is. This is a system designed to give a part of the spread back to the trader. Indeed, this has become a crucial part of the contemporary Forex industry since any Forex trader who is pretty active in trading currencies can save a lot of money on spreads and other fees charged by Forex brokers. When you save money you also contribute to higher profit potential. Even if you a beak-even trader, you can still make money at the expense of rebates. The more active you are in trading, the more money you can actually save and the higher payout you will eventually get from the rebate service you use.
 
Publication date: 01 September 06:55 AM

Masterforex-V Expo Names Best Forex Affiliate Offers in August 2015

 

These days both professional traders / investors and plain folks have all chances to succeed in working in he contemporary Forex industry. Indeed, Forex really stands out from the crowd of other financial markets. Why? The thing is that FX is the world's largest financial market. That is why there is nothing to be surprised about the fact that more and more pros and rookies with little to zero expertise in trading are truly seduced by this tasty and extremely big piece of cake.
 
Publication date: 01 September 06:48 AM

With Forex-Market, You Can Forget About “Black Mondays”

All those black Mondays, Tuesdays, Wednesdays, Thursdays and Fridays keep on haunting FX traders these days. It’s been around 6 months since the SNB unpegged the Swiss Franc, thereby triggering force-majeure in the Forex industry. Greece has been causing stress to FX traders as well.

On August 24th, we could see another case of abnormal market volatility. Major stock indexes crashed, currencies went wild. Was this another stress test for FX traders and even brokers? This is the question we asked the Forex-Market company.

Publication date: 31 August 02:46 PM

New Scandal with Large Forex Broker: IronFX “Under Investigation" of CySec

 

“To all appearances, crisis of Forex brokers continues," unanimously claim many analysts. And there is no bottom to this bearish trend. Not only small and medium players quit the market, but also such famous companies as Forex Trend, "Panteon-Finance", RVD Markets, etc.
 
Publication date: 28 August 03:22 PM

Fort Financial Services on Benefits of Using VPS for Forex Robots

These days, more and more traders prefer automated trading to manual one. In other words, they outsource the trading process to trading robots. They say that the biggest advantage of using trading robots (also known as expert advisors) is the absence of emotions all human traders are subject to. Indeed, emotions in trading lead to poor results more often than not.

Publication date: 28 August 02:04 PM

NordFX Introduces New Bonuses For Forex Traders

As you probably know, Forex is the worlds’ biggest financial market. Therefore, the money is more then enough for the average trader to get rich. On top of that, immense financial flows (several trillion dollars a day) stimulate innovation in trading,  which leads us to believe that contemporary FX brokers create a more favorable environment for retail traders to make money consistently.

Publication date: 28 August 09:58 AM