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Category: Options Trading

Option trading has two main components – puts and calls. While the call option is used for the option of buying a certain futures contract, the put option is for the option of selling them. Another terminology used in options trading is strike price. This strike price is the price at which the underlying asset is confirmed to be bought or sold when the trader exercises the option.

There are a few other noteworthy items about option trading and each one is important. Take for example the expiration date of the option and the option style, so on and so forth. Once you understand the terminology, you will be able to understand options trading clearly.

One thing to remember about options is that they are comparatively less liquid than futures contracts. For those who analyze the markets thoroughly and regularly, options trading is just a great way of controlling risks. We at Cannon Trading help you understand options trading better and also provide you good advice on options trading. This category archive talks about a number of option trading blogs and articles to give you the most recent update on options.

25 Proven Strategies for Trading Options 4.20.2016

Posted on by Ilan

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1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Wednesday April 20, 2016

Hello Traders,

For 2016 I would like to wish all of you discipline and patience in your trading!

Voted #1 futures trading blog!

Greetings!

25 Proven Strategies for Trading Options

by CME Group

If you are currently trading options on futures or are interested in exploring them further, check out our newly updated trading guide, featuring 25 commonly used options strategies, including butterflies, straddles, strangles, backspreads and conversions. Each strategy includes an illustration demonstrating the effect of time decay on the total option premium involved in the position.

25 Proven Strategies for Trading Options

Options on futures rank among our most versatile risk management tools, and are offered on most of our products. Whether you trade options for purposes of hedging or speculating, you can limit your risk to the amount you paid up-front for the option while maintaining your exposure to beneficial price movements. To learn more about CME Group options, you can also visit our Options page.

Complete the simple form below and you will receive a link to download the 25 Proven Strategies brochure immediately.  This eBook is free to you and no-obligation.  Learn about the 25 Proven Strategies for trading options on CME Group Futures for FREE!  

Don’t wait… Download the eBook “25 Proven Strategies for Trading Options” NOW! 

8 Steps to Successful Futures Day-Trading 12-02-2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Tuesday December 2, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Wishing all of you a great trading month in December.
My name is Ilan Levy-Mayer and I am the Vice President and Senior Futures Broker at Cannon Trading. I came up with the following personal observations after serving online traders worldwide for more than 17 years.

8 Steps to Successful Day-Trading

The following steps are guides to progress, and are not necessarily in sequential order. Some of them are always required, but each futures trader is different and will relate to these stages in their own ways. While attempting to learn and progress, one must keep in mind that futures trading is risky and can involve significant losses.

1. Education

Hopefully if you are already trading you have completed your initial education: contract specs, trading hours, futures brokers, platforms, the opportunities as well as the risk and need to use risk capital in futures, and so on. Understanding this information is essential to futures trading. The second type of education is ongoing: learning about trading techniques, the evolution of futures markets, different trading tools, and more.

2. Find a System

I am definitely not advising you to go on the web and subscribe to a “black box” system (using buy/sell triggers if don’t know why they are being generated). What I am advising is developing a trading technique: a general set of rules and a trading concept. As you progress, you may want to put the different rules and indicators into a computerized system, but the most important factor is to have a focus and a plan. Don’t just wake up in the morning and trade “blank.”

Futures Day Trader Advice & Economic Reports 11.05.2015

Posted on by Ilan

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Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Thursday November 05, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Today I must share an observation that may help many of you. So many times as a broker I see clients who know how to make money… I see it in the daily statements, good winning %, consistent profits UNTIL….something happens. Either the client who is normally a day-trader decides to carry his/hers losing position and make it into a swing trade…..OR the trader is down and refuses to accept the fact it may be a losing day and decides to double down and get more aggressive because if this trade is a winner he will have another winning day….the examples go on and no I am not referring to anyone specific although many of you probably think I am talking about them.

I have done it before as a trader. It is the inability to accept a loss that creates this snow ball.

I am not a psychologist nor a professional writer ( English is my second language if you did not tell by now (-:

What I am hoping for is that by writing this I may help the “good voice” inside your head that tells you DONT double down OR just keep the stop, win over that bad voice that is whispering to you to go ahead and reverse the position and double it when it is clearly not in your game plan…Trading is tough mentally, financially and emotionally, help yourself be a better trader by being a more disciplined trader.

Futures & Commodity Trading Tools 10.16.2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Thursday October 16, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Browse and use our FREE Trading Resources for Futures and Commodities

Futures Day Trading Tip & Economic Reports 10.07.2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Wednesday October 7, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Survivor Day Trading

This article was published by the Stocks, Futures, & Options Magazine in September, 2007 and was written by our VP, Ilan Levy-Mayer. We think this article is timeless and whether you are beginner or advanced trader, you will enjoy it.
Perhaps the greatest luxury I have in this business is the ability to observe the experiences of many traders with different personalities, life schedules and risk capital, each trading in a variety of markets. What most astute brokers realize is that, over time, as some individuals prematurely exit winners while others desperately cling to losers, Day trading is by definition a trade that is initiated and completed during the same trading day. In this wide category, you will find many types of traders. On one end of the spectrum are scalpers, who go for one or two ticks of profit several times a day in trades lasting just seconds. On the other side are speculators who stay in a position from the start of the day until the close. One of the main appeals of day trading for all types is that the trader goes home flat without having to worry about positions. When the market closes, the day is done. Money management, as the name implies, is applying prudent principles to help conserve your trade (risk) capital. Without risk capital to trade, a speculator does not have a chance to succeed.

FOMC Week & Economic Reports 9.16.2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Wednesday September 16, 2015

 

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Big FOMC this week! Meeting takes place tomorrow and Thursday with much anticipated announcement and language on Thursday, 2 PM EST.

Futures Options 101:

Market Strategies

1. Bullish Market Strategies

Futures Options Trading
Spread Strategy		 Description Reason to Use When to Use
Buy a call Strongest bullish option position Loss limited to premium Undervalued option with volatility increasing
Sell a put Neutral bullish option position Profit limited to debt Small debit, bullish market
Vertical Bull Calls Buy call, sell call of higher strike price Loss limited to debt Small debit, bullish market
Vertical Bull Puts Buy put, sell put of higher strike price Loss limited to price difference Large credit, bullish market

2. Bearish Market Strategies

Futures Options Trading
Spread Strategy		 Description Reason to Use When to Use
Buy a put Strongest bearish option position Loss limited to premium Undervalued option with volatility increasing
Sell a call Neutral bearish option position Profit limited to premium Option overvalued, market flat, bearish
Vertical Bear Calls Buy at the money put, sell out of the money put Loss limited to debt Small debit, bearish market
Vertical Bear Puts Sell call, buy call of higher strike price Loss limited to stroke price difference minus credit Large credit, bearish market

3. Neutral Market Strategies

Futures Options Trading
Spread Strategy		 Description Reason to Use When to Use
Strangle Sell out of the money put and call Maximum use of time value decay Trading range market with volatility peaking
Arbitrage Bull and sell similar simultaneously Profit limited to debt Any time credit received
Calendar Sell near month, buy far month, same strike price Near month time value decays faster Small debit, trading range market
Butterfly Buy at the money call (put), sell 2 out of the money calls (puts), buy out of the money call (put) Any time credit received
Guts Sell in the money put and call Receive large premium Futures Options have time premium and market in trading range
Box Buy at the money put, sell out of the money put Small debit, bearish market
Ratio Call Buy call, sell calls of higher strike price Neutral, slightly bullish Large credit and difference between stroke price of option bought and sold
Conversion Buy futures, buy at the money put, and sell out of the money call Any time credit received

Futures Options Writing

Have you ever wondered who sells the futures options that most people buy? These people are known as the option writers/sellers. Their sole objective is to collect the premium paid by the option buyer. Option writing can also be used for hedging purposes and reducing risk. An option writer has the exact opposite to gain as the option buyer. The writer has unlimited risk and a limited profit potential, which is the premium of the option minus commissions. When writing naked futures options your risk is unlimited, without the use of stops. This is why we recommend exiting positions once a market trades through an area you perceived as strong support or resistance. So why would anyone want to write an option? Here are a few reasons:

Top 50 Futures Trading Rules & Economic Reports 9.09.2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Wednesday September 9, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Greetings! 

Top 50 Futures Trading Rules

Most Common Pitfalls To Avoid When Trading Futures-Commodity Futures Continue reading “Top 50 Futures Trading Rules & Economic Reports 9.09.2015”

FOMC Minutes & Futures Levels 8.19.2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Wednesday August 19, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Hello Traders,

FOMC minutes tomorrow so I am sharing the brief overview from ForexFactory.com:

Source Federal Reserve (latest release)
Usual Effect More hawkish than expected = Good for currency;
Frequency Scheduled 8 times per year, 3 weeks after the Federal Funds Rate is announced;
Next Release Oct 8, 2015
Why Traders
Care		 It’s a detailed record of the FOMC’s most recent meeting, providing in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates;
Acro Expand Federal Open Market Committee (FOMC);

Check out our Trading Systems/ALGO Trading and Managed Accounts section!

Many ways to trade any market, many ways to lose money in any market and only very few ways to lock in gains. If you need help creating a trading plan, visit our broker assist services.  

Continue reading “FOMC Minutes & Futures Levels 8.19.2015”

Futures Levels & Economic Reports 8.18.2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Tuesday August 18, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Hello Traders,

Today I must share an observation that may help many of you.

So many times as a broker I see clients who know how to make money…I see it in the daily statements, good winning %, consistent profits UNTIL….something happens. Either the client who is normally a day-trader decides to carry his/hers losing position and make it into a swing trade…..OR the trader is down and refuses to accept the fact it may be a losing day and decides to double down and get more aggressive because if this trade is a winner he will have another winning day….the examples go on and no I am not referring to anyone specific although many of you probably think I am talking about them.
I have done it before as a trader. It is the inability to accept a loss that creates this snow ball.
I am not a psychologist nor a professional writer ( English is my second language if you did not tell by now (-:

Top 50 Futures Trading Rules 8.14.2015

Posted on by Ilan

Connect with Us! Use Our Futures Trading Levels and Economic Reports RSS Feed.

Like us on FacebookFollow us on TwitterView our profile on LinkedInFind us on Google+Cannon Trading Futures Trading Resistance & Support Levels and Economic ReportsFind us on Yelp

1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Friday August 14, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

Hello Traders,

Most Common Pitfalls To Avoid When Trading Futures-Commodity Futures

Separator

500 experienced futures brokers were asked what caused most futures traders to lose money when comes to trading futures.

Their answers reflected the trading experience of more than 10,000 futures traders.  Download the PDF and find out what they said. Continue reading “Top 50 Futures Trading Rules 8.14.2015”

RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.