Futures Trading E-Book

FOMC Week & Economic Reports 9.16.2015

September 15th, 2015 Filed under Commodity Trading, Day Trading, Future Trading News, Futures Trading, Options Trading | Comment (0)

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

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!

Voted #1 futures trading blog!

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:

Read the rest of this entry »

Top 50 Futures Trading Rules 5.13.2015

May 12th, 2015 Filed under Commodity Brokers, Commodity Trading, Day Trading, Future Trading News, Futures Broker, Futures Trading, futures trading education, Trading Guide | Comment (0)

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

Hello Traders,

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

Voted #1 futures trading blog!

Hello Traders,

Top 50 Trading Rules:

Most Common Pitfalls To Avoid When Trading Futures-Commodity Futures

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.

1.) Have a Plan

Many futures traders trade without a plan. They do not define specific risk and profit objectives before trading. Even if they establish a plan, they “second guess” it and don’t stick to it, particularly if the trade is a loss. Consequently, they overtrade and use their equity to the limit (are undercapitalized), which puts them in a squeeze and forces them to liquidate positions. Usually, they liquidate the good trades and keep the bad ones.

2.) News Factor

Many traders don’t realize the news they hear and read has, in many cases, already been discounted by the market.

3.) Trade Objectively

After several profitable trades, many speculators become wild and nonconservative. They base their trades on hunches and long shots, rather than sound fundamental and technical reasoning, or put their money into one deal that “can’t fail.”