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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.

 

 

 

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

 

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Best Forex Traders Manage over Accounts of Pro-rebate.com and Arsenal-FX

How to Make Big and Stable Money in Modern Conditions?For many citizens of Russia and CIS, this, unfortunately, is impossible. The main reason of this is not inflation or devaluation, not miserable salary, and not even prices, which sprout like mushrooms after the summer rains.
The main reason of impossibility to earn as much as we want lies in ourselves. Anxiety, greed, fear, lack of self-confidence, doubt, life by a Murphy’s Law that “every decision leads to new problems” hide real opportunities of financial independence.
Publication date: 22 April 10:07 AM

Masterforex-V Expo Names TOP 17 Forex Brokers in April 2015

 

Thanks to Masterforex-V Expo’s rating of Forex brokers , any trader can personally decide on which Forex broker to go with in order to trade currencies on a regular basis. The biggest benefit of this rating is that it is based on independent quantitative criteria and therefore is unbiased.

 


We should keep in mind that choosing a reputable Forex broker is the prerogative of all Forex brokers, both rookies, intermediate traders and true experts with many years of expertise. There is nothing to be ashamed in switching from one broker to another even if you are an advanced trader since the contemporary Forex industry is pretty dynamic, with dozens of brokers competing for the top places in the rating and improving their products and services while coming up with innovative solutions.

Publication date: 22 April 08:37 AM

HP DreamColor Z32x – 4К-Monitor for Business Sector

Hewlett-Packard company has informed about renewal of the line of monitors DreamColor, oriented on professionals in the sphere of graphic design. As already informed by the “Market Leader”, models DreamColor Z32x, Z27n, Z25n, Z24n Z24nq, and Z24nf will add to the assortment of American manufacturer; they differ from previous variants by a thin display framing, higher resolving power, and better color rendering.
 
Publication date: 16 April 02:04 PM

Optimize Trade at Forex with YA-HI.com: Combination of Indicators

It is believed that indicator appeared at the same time as the mere notion of technical analysis of quotation charts. Over time their number was rising. And nowadays even in basic versions of trading terminals of forex-brokers we usually get a choice of tens of various indicators. However, any of them just indicates the likelihood of a certain course of events in future, but does not guarantee that the curve of the chart will move exactly to the side, pointed at by the indicator. It’s a different matter if we look at two or three indicators at the same time. Then chances of making a correct prediction get much higher. How to use several indicators at the same time has been explained by the broker company YA-HI.com.
 
Publication date: 16 April 10:02 AM

Masterforex-V Expo Names Most Popular Binary Brokers in March 2015

 

Binary options are pretty specific type of assets to trade or invest in. With binary options, you can make decent but fixed-income profits since binary options are all-or-nothing investments.

Publication date: 14 April 12:00 PM

Masterforex-V Expo Names Best Forex Bonus Offers in April 2015

 

More Forex companies keep joining the international Forex market, which makes the inner competition tougher. This means that all Forex brokers (both young ones and heavyweights) now have to compete for the existing and new clients.

Publication date: 14 April 03:32 AM

40 Traders of Masterforex-V Earn Over 43 Ths. Points of Profit for March

Another bypast month proves the consistency of a conclusion about success of the system of autocopying accounts of Forex traders, which nowadays can give a worthy support to a family budget.
 
A web site for investors pro-rebate.com has told the "Market Leader" another statistics of earnings made by 40 successful Forex traders, whose deals can be copied free-of-charge via pro-rebate.com system.
Publication date: 10 April 01:10 PM

Larson&Holz Offers Traders to Work with CFD Equity Contracts

Traders of a broker company Larson&Holz have a great opportunity to trade currencies with CFD equity contracts. Specialists explain that trading contracts is very different from buying shares.

Publication date: 09 April 08:12 AM

Masterforex-V Expo Names Best Forex Micro Brokers in April 2015

 

These days, you can get a whole lot of services offered by Forex companies. Even rookies with tiny trading capital have got a great opportunity to start trading Forex thanks to the so-called micro / cent accounts (they usually start from $1). I guess that some of you may have some questions like:
 
What are micro / cent accounts and why are they so popular among rookies worldwide? Why do you recommend choosing micro / cent accounts (usually $1 to $50) when deciding to switch to real-money trading? What are those micro brokers that enjoy the highest reputation and rating? Ok, I will try answer them here…

Publication date: 09 April 05:44 AM

Masterforex-V EXPO Names Forex Brokers with Best Analytics in March 2015

 

Undoubtedly, market analytics is the “face” of any modern broking company, whether it is Forex or binary options, or any other financial market. A lot of Forex traders and investors, both newbies and professionals, take those analytic figures into account when making their trading or investment decisions. This means that traders need timely data of pretty high quality for the sake of helping traders and investors make troy weighted decisions putting the odds in their favor and allowing them to win in the long run.

Publication date: 08 April 02:45 PM