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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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ActivTrades Launches Educational Center

 

Being a client-oriented regulated Forex broker, ActivTrades offers you the following strengths and benefits of trading Forex and other financial markets:

 


Over 50 currency pairs as well as precious metals, stock indices, commodities and stocks. All of them available through a truly powerful and globally recognized trading platfrom - MetaTrader 4 and/or MetaTrader5 (mobile versions are available as well).

Publication date: 12 September 08:45 AM

EURUSD: Euro Consolidates Close To 1.2920

 

The world's most popular currency pair which is EURUSD has been trading within the scope of a pretty wide price range (1.2858-1.2962) for 3 days in a row. While staying within the range, the common currency tried to strengthen against the US Dollar yesterday.
 

Publication date: 12 September 07:53 AM

GKFX's Renewed PAMM Service Generates Over 12% ROI Evert Week On Average

 

Most of the rookie traders and investors who make their first steps in the trading environment dream of trading big and generating considerable profits. Still, they lack trading experience and necessary skills to make their dreams come true but they still want to make money… Well, to tell you the truth, everything is not as bad as it used to be a decade ago. This is because more and more companies introduce and improve their PAMM services.
 
Publication date: 12 September 07:51 AM

EURUSD: Currency Pair Goes Flattish While Market Consolidates

 

The world's most popular currency pair which is EURUSD has been trading within the scope of a pretty wide price range (1.2858-1.2962) for 3 days in a row. While staying within the range, the common currency tried to strengthen against the US Dollar yesterday.
 
Publication date: 12 September 06:50 AM

Million Dollars to Skilful Hands 3 by Forex Trend. New Opportunities For Winning Traders

 
They say independence needs confidence while dependence requires hope. As a rule, successful people belong to the former group while most of people unfortunately belong to the latter one. Average people are constantly facing various deterrents and obstacles, including the dependency on the boss, constant income-related headaches, inflation, endless bills to be paid in time. Sometimes, bosses abuse their employees, forcing them to work overtime so as to not lose the promised premium or bounty.
 
Publication date: 12 September 05:28 AM

Euro Starts Friday From Gaining Value Against Dollar

The EU is ready to introduce another package of sanctions against the Russian Federation. The sanctions may influence negatively on the European economy, which may result on the common European currency losing even more of its value against the US Dollar.
 

Publication date: 11 September 07:14 AM

Forex. USD Index Consolidates Close To 84,52 High While Waiting For Major News

 

Today, on September, 11th, the US Dollar index reflecting the strength of the US Dollar against 6 other major currencies, is consolidating close to the local high of 84,52. The local high was set on September, 9th.
Publication date: 11 September 07:11 AM

EURUSD: Euro Consolidates Close To 1,29 VS US Dollar Amid New Sanctions Against Russia

 

The EU is ready to introduce another package of sanctions against the Russian Federation. The sanctions may influence negatively on the European economy, which may result on the common European currency losing even more of its value against the US Dollar.
 
Publication date: 11 September 04:30 AM

FinFX Introduces Signal Trader – Industry's Best Solution For Mirror Trading

 

Strengths: Why FinFX?
 
The Finnish Forex broker named FinFX can be considered a True ECN/DMA Broker. This status was earned by constantly following a distinct set of true values. FinFX's core values have definitely remained unchanged ever since the very moment the company was established. They can be divided into 3 categories. The first one has to do with reliability while the remaining to categories revolve around exclusively excellent trading conditions and true customer focus.
Publication date: 10 September 04:11 PM

EURUSD: Euro Stays Around 1.2930

 

The common European currency set an intraday high a 1.2957 yesterday. At the beginning of the European trading session, the currency pair retraced back to 1.2930. This is the price level the currency pair is currently trading around while tyring to consolidate.
 
Publication date: 10 September 07:12 AM