Heroes of Ukraine

«Market Leader» - news and previews making you rich.

Friday, 26 August 04:20 (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.

 

 

 

You are free to discuss this article here:   forum for traders and investors

 

Add to blog
Got a question? – Ask it here »
 

NordFX Names TOP 10 FX Signal Providers in August 2016

As the entire FX industry gets more and more mature, some of the best broker representing the entire industry keep on giving birth to revolutionizing products and services.  To be more specific, some of the best and most reputable FX brokers can boast their own services allowing anyone to benefit from FX trading over the long term, even without actual trading.

Publication date: 23 August 04:53 AM

Masterforex-V Club Gives 26 Accounts To Managing Traders.

Masterforex-V Club started a new contest to find the best managing traders out there to manage their money. 8 traders won the July round of the contest. As a result, each of them got 1 to 9 accounts to manage.

 

 
Publication date: 22 August 04:16 PM

PrivateFX №1. 4 Weeks of Tests

4 weeks of tests later, Masterforex-V Academy investors decided to share with you the preliminary results once again. The first 20 days of investing within the scope of the PrivateFX №1 portfolio turned out to be profitable. Still the last trading week of July ended up with a a drawdown (2,53% of net loss) triggered by some market shocks.

 

 
Publication date: 22 August 02:46 PM

NAS Broker: Making Money On Olympic Games

The 2016 Olympic Games are underway in Rio. The entire world has been closely watching the games since day one. At the same time, millions of peoples are looking for the ways to capitalize on the Olympics through bookmakers when betting on certain players, teams, their stats, score, and stuff.

Publication date: 19 August 01:47 PM

“Collect The Word” Promo by PrivateFX: Charity or Smart Investment?

The contemporary internet marketing is an art and a science at the same time. The thing is that it’s hard to tell the difference between logic, calculation and talents when it comes to introducing innovative products and services.

 

 
Publication date: 15 August 12:36 PM

Italy's Financial System May Trigger Eurozone Collapse

At this point, the state of affairs in the Italian financial system leaves much to be desired. To be more specific, it may eventually result in a Eurozone crash, the gloomiest forecasts say.
 
Publication date: 03 August 03:12 AM

Golden Bonus by PrimeTime Finance: Plus $100 For Binary Options Traders

More and more experts acknowledge that binary options are a universal instrument for all kinds of traders. Binary options are much easier to trade and more flexible in many aspects, which is why they have been enjoying international recognition ever since they were created. Even though trading binary options can be risky at times, conventional trading has the same kind of risks. With that being said, binary options are still a good way to trade your favorite underlying assets more efficiently.
 
Publication date: 02 August 08:30 AM

Masterforex-V Expo: Best FX Brokers For Scalping. July 2016

At times, most of us out there may have a hard time choosing a truly reliable FX broker to go with. At the same time, if you are fond of short-term trading strategies like scalping, the very process of choosing such a broker turns into a challenge since not every broker out there approves scalping. Indeed, all lot of representatives of the contemporary FX brokerage industry don’t see scalpers as their loyal customers at best. With that being said, such brokers may simply play some dirty tricks on scalpers or simply ban them from trading for fear of having their trading software crash on overload.

 

 
Publication date: 29 July 09:14 AM

Masterforex-V Expo: Best FX Bonus Offers. July 2016

It is obvious that almost each and every FX broker in the contemporary FX industry offers various FX bonuses to keep those traders coming. More often than not, you can see those brokers offering bonuses continuously in order to compete with other brokers for the clients and to let the client enjoy some kind of a gift upon registration. Other brokers offer other kinds of bonuses and promos on top of first-deposit bonuses.

 

 
Publication date: 29 July 09:07 AM

Masterforex-V Expo: Most Reliable FX Brokers. July 2016

Before diving deep into FX trading, make sure that you are going with a reliable FX broker since this is a crucial choice, which is going to influence your entire trading career. The thing is that you can do without a broker simply because it is impossible for retail traders to access the Forex interbank environment without it. At the same time, there are hundreds of FX brokers offering their products and services to retail clients online these days. Apparently, some of them are far from being reliable businesses, which means that you should pay attention to several factors and requirements when looking for an FX company.

 

 
Publication date: 29 July 06:02 AM