The Option/Spread Recommendations is a service designed to outline and deliver specific trading opportunities. These involve futures and commodity options, futures and options combinations, or futures spreads. The recommendations are released at different times, as market opportunities arise. Normally, these average about one or two per week.
The recommendations are meant to be current and educational while breathing life into historical statistics and fundamentals related to the commodities. They are based on seasonal dynamics, current fundamentals and technical analysis. They include the potential risk/reward levels.
We use our extensive experience and the research of our affiliated FCMs to identify opportunities that can provide you with a “trading edge” over the markets. Some of our best opportunities arise when there are temporary disparities in volatility between different option strikes or different contract months. We also have a highly experienced team system traders, developers and strategists, and we combine our knowledge in a “team effort” to bring the best opportunities to your attention.
The recommendations can range from simple option purchases to more complex strategies that may be more appropriate for the current market condition. Trades range from short-term positions with defined targets to long-term trades that can last several months. Both fundamental and technical analysis are used to make trade recommendations. Seasonal pattern charts may also be included, showing analysis of average historical price patterns for various markets
All of the new and continuing trades are presented in a table format. It includes many pieces of important information about the suggested position.
Trade Position is the first column of each trade recommendation. This specifies the trade, and may offer an alternative variation with different risk for more conservative of more aggressive traders. Suggested entry prices are usually specified. This is our best estimate of what the premium should be at the time of entry, whether the trade is put on at a debit, credit, or even money. These estimates include expectations for “slippage” due to the bid/ask in the options.
If you like a position, but it’s not available at the suggested price, try to get a bid/ask from the floor and then decide if you still want the trade. We do our best to give realistic estimates for entries, but sometimes market conditions change quickly.
Suggested Risk: Suggestions for risk control or adjustments are often included. Money management is an extremely important part of the trading plan, and each trader must determine his own appropriate threshold based on account size and number of positions. Generally, the recommend risk is no more than 5-10% (preferably 3-5%) of account equity on a single position. Even for traders with smaller accounts, 10% should be the maximum intended risk.
Trading Targets: The trades purchases recommended or other strategies have Profit Objectives, especially if we are trying to trade an expected “swing” in a market, having a price objective for the underlying market.
Along with the original risk stop, if the trade moves far enough in our favor, we might suggest using a “trailing stop”, either to reduce the original risk or to lock in a profit. A trailing profit stop would involve monitoring the market as it moves in favor of the trade, but closing the position if the market moves back far enough to take away more than a certain percentage of the profits. Otherwise, specific levels in the futures price might also be used to follow the market and trigger adjustments for trades.
If you would like more information about
Systems, please call Toll Free
1-866-424-5826, E-mail firstname.lastname@example.org or send an Electronic Request.
THERE IS RISK OF LOSS IN
OPTIONS TRADING. PAST PERFORMANCE IS NOT
NECESSARILY INDICATIVE OF FUTURE RESULTS.
OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN
ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL
TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY
HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET
FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE
ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.
NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE
PROFITS OR LOSSES SIMILAR TO THOSE SHOWN."
DISCLAIMER: The use of stop loss order does not guarantee that your losses will be limited to the intended amount. Certain market conditions could make it impossible to execute such orders.