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

Saturday, 22 November 06:08 (GMT -05:00)


Market Leader Free Newsletter
Your Name:
Your Email:

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 »
 

RVD Markets Launches 20+5 Bonus For Investor and Managing Traders

Amid today's financial uncertainty and geopolitical instability, people are forced to seek extra income sources to back their financial future. Inflation coupled with the devaluation of national currencies seen in most countries around the globe make people think about multiple sources of stable income since a monthly paycheck is simply not enough these days to feel financially secure.

Publication date: 21 November 06:26 AM

Start of New Season of Panteon-Finance “Arena of Investors”

For most of us the talent of making trouble has always exceeded the skill of avoiding them. Very few people manage to rationally solve problems at smallest costs. Instead, we compensate for our personal moral and material losses by discussing someone else's difficulties.
 
Publication date: 19 November 08:39 AM

Traders Name Brokers With Opportunity to Enter Masterforex-V Expo's Ultimate Rating

 

At some point, all Forex traders face the unavoidable challenge of choosing a reliable and reputable Forex broker in order to succeed in Forex trading in the long run. The thing is that depositing is easy with any broker, whether it is a scam or a truly reputable one. However, when it comes to withdrawing your profits or even deposits, only reputable brokers can withdraw money without delays and questions and lame excuses, which is certainly not the case with minor brokers and scam brokers.

Publication date: 19 November 05:42 AM

Samsung Becomes Apple's Biggest CPU Supplier Again

 

According to The Korean Times, Apple ans Samsung, 2 biggest rivals in the mobile device segment, are going to revive the cooperation again. If to believe the media, the Korean tech heavyweight is going to revive its position of Apple's major CPU supplier once again. The CPUs are designed for Apple's mobile devices - iPhones and iPads.

Publication date: 18 November 06:37 AM

Forex Moneymaking: Reality and Challenges

 

Apparently, each of us dreams of quitting his/her job and enjoying a financially abundant life with big and stable income flowing into his/her pockets on a regular basis. With that said, there are many ways to financial freedom and success. Still, if to consider such factors as speed and ease, there is probably no better solution than financial markets, including Forex, which is currently the world's biggest financial market in the world with over 5 trillion dollars being turned over on a daily basis! This is a big and tasty cake and everyone wants a piece of its.

Publication date: 18 November 05:30 AM

Masterforex-V Expo Reveals 23 Most Reputable Forex Brokers in November 2014

 

Finding a reputable and reliable broker, which can be trusted 100%, is not an easy task these days. A reliable trading partner is definitely as important as a profitable trading strategy along with trading skills and valuable knowledge. Indeed, does it really matter how good you are at Forex trading if your broker can let you down at any minute by giving you non-market quotes, order execution errors or by simply refusing to pay? The answer is obvious. Choosing a reputable Forex broker is one of the cornerstones of success in this risk but profitable human activity...
 
How to avoid dirty dealing centers and broking companies? How to choose between the industry’s best and most reliable brokers? Masterforex-V Academy knows the answer to this question...

Publication date: 18 November 04:24 AM

TraderGlobal on How to Benefit from Copying Trades by Successful Forex Traders

 

How can a beginning Forex trader achieve success in trading Forex? This is a burning question. Should a broking company with easy registration and a bunch of catchy bonuses and promos appear in the industry, a whole army of unaware rookies fall prey to those empty promises only to lose their money. Still, trading financial markets can be pretty beneficial.

Publication date: 17 November 02:24 PM

uTrader: How to Start Binary Options Trade?

Broker company uTrader is known since 2011.At the beginning of 2014 uTrader has fully updated its platform and started providing extremely wide spectrum of opportunities for trading. Special attention is given to binary options trade – a relatively new instrument на uTrader, for in modern conditions it is critically important for the broker to help its clients to cut the risk of losing capital to a minimum. The more money ordinary traders make, the better it is for the company. To reach this goal, uTrader has created the largest call centre in Forex industry. From now on experienced specialists are always ready to come to help the company’s clients by providing competent support on-line. Besides, the company provides analytical support. Professional traders help market participant to correctly assess current condition of the market and make predictions on further fluctuation of currency pairs and other financial instruments.

Publication date: 17 November 12:29 PM

MasterForex-V Academy Reveals Concord Bay Test Drive Results

 

There are hundreds of Forex broking companies offering their brokerage services to retail Forex traders and investors worldwide. Apparently, there are fakes, scams, mediocre and reputable world-class companies out there. Reputable brokers are mostly old, operating for many years in the international Forex industry as true heavyweights. Still, there are young but promising Forex brokers deserving respect and trust...

Publication date: 17 November 09:43 AM

“Stars of MMGP”: How Collective Mind Helps Forex Traders

 

Modern Internet is not only a place for reading news, communication and entertainment, but also a powerful resource, allowing hundreds of millions people to earn money regardless of place of their residence. As estimated by specialists, today even an average level of computer literacy opens wide opportunities for any housewife, student, temporary unemployed person, in a word, everyone, who has at least several hours per day to sit in front of a monitor.
Publication date: 14 November 08:18 PM