A number of different techniques and strategies are available to option investors to help assist them in achieving consistent and reliable monthly income from the option market.
For example there is the butterfly spread, the iron condor, the diagonal (an/or the double diagonal), and the calendar spread, the double calendar spread - and, the Vertical Spread, which is sometimes also referred to as the Credit Spread.
The vertical spread (or credit spread) is a foundational trade that can be found in many other option income strategies. The iron condor spread is in actuality just two vertical spreads placed on either side of where the market is trading.
The butterfly position is also comprised of vertical spreads. The lower half portion of the butterfly spread is simply a vertical spread - as is the top half. Same goes with the iron butterfly. This trade also is built from verticals - a call vertical and a put vertical.
Vertical spreads can be used with both put and call options. A bearish vertical is called a bear…
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31 August 2010
Forex Trading
Currency Trading, finance, Forex, Forex Trading, investing, investment, option trading, personal finance, stock, stock market, stock trading, trading, vertical spread, wealth building
A cash flow option technique that is used by both professional traders as well as retail traders is the Calendar Spread. This technique is a favorite among option traders who use options as a way to generate reliable monthly cash-flow.
The calendar spread performs best and kicks off income due to the nature of the trade. This is a theta trade - an option strategy that takes advantage of options decaying value. As the days tick by heading towards expiration day - the time premium in the options lose their value. This in turn is what creates the profit for the calendar spread trader.
These trades can be built from call options as well as put options. In order to create a calendar spread trade, the option trader sells a near month strike on an underlying vehicle - and then buys a later month at the identical strike. Profit can be made from this trade because what happens over time is that the time premium in the closer month option decays at…
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Even though the Forex markets have been around since the 1970’s and were mainly used by entities such as banking firms, corporations and big investors, the dawn of the World Wide Web has ensured that online currency trading is available to the masses.
Now everyday people like you and me can take advantage of the Forex markets in the comfort of our own homes by simply pressing a few buttons on our computer. Not only that but it is very easy to get into.
More and more money changes hands every day now in Forex than ever before. Over $4 trillion is exchanged on a daily basis and it is because of the accessibility through the Internet that this happening.
You don’t need much to get started either, have a look at the necessities:
- A computer, laptop or Mac which is connected to the Internet. - You need a broker that will buy and sell your currencies on your behalf in the market. - Ideally a system or strategy in place to know…
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These days people want to earn huge profits from their investments. From all various kinds of investment possibilities, the best form of investment is CFD trading, also known as CFD. Just within a small time span, you can earn great returns on your investments. CFD trading allows you to enjoy these benefits that are mentioned below:
Trading on Margin: Trading on margins helps the traders to invest lesser than they posses. This shows that the trader contributes lesser than what he actually holds. This helps them yield higher ROI.
Trader’s need not purchase assets: It is not compulsory for any trader in CFD trading to purchase assets. The trading is done on the basis of a deal agreed between the trader and the agent. The purchase of the underlying asset is not require under the CFD agreement.
No stamp duty required: There is no need of any stamp duty where CFD trading is concerned. Since there is no purchase done, hence no need of stamp duty .
Traders earn dividend: CFD trading assists the…
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U.S. Dollar moved nicely higher this week against the other major currencies, as the dollar index bounced powerfully higher from 200 SMA, discussed in the past post.
Our special focus is Usd/Cad, which moved for almost 400 pips higher since the past Friday, when unemployment data for U.S. and Canada were released. The pair reached 1.0500 resistance region over the past few sessions, from where a quite powerful reversal has been seen, as dollar was showing an extremely overbought picture across the board. In fact, even Asian stock market rose today, and slowed down the U.S. dollar gains.
It seems that oil also found temporary lows, around 75.50, and is driving the Usd/Cad lower. However, on oil we believe that an upward bounce is only temporary and that new lows will follow in the near-term. The Usd/Cad price action also suggests that the pair is currently trading only in a corrective pull-back, as we can count clear five waves up from 1.0107 region, which should be part of some lager bullish…
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