This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Spreads, published on Tuesday, August 07 2018.
There is a futures spread trade opportunity in the Euro Dollar market. Want to know more about the Euro Dollar contract? Read the Market Spotlight POST.
A Double Top Formation has developed this summer with one high at .6850 (5/17/18) and the second formed last week at .6700 (8/01/18). Selling the spread on a break of recent low. According to the Stochastic indicator this spread is overbought. The trend looks flat, but ready to turn down as well. There is a seasonal tendency to be short this spread going into September.
Establishing a bearish spread position where a front month contract is sold and a deferred month contract is purchased. Anticipating this spread to narrow towards even (zero). Setting up a futures spread will potentially reduce the risk and volatility. You could trade multiple positions with the low margin/risk parameters.
Sell the September 2018 / Buy the September 2020 Euro Dollar spread at .5975 points using a stop order, GTC.
Initial Margin = $374 Maintenance Margin = $340
Stop loss: Stop loss on .6875 points, above the twelve-month spread high, GTC. (Initial Risk: $225)
Target: Target on .3600 points, the twelve-month contract low, GTC. ($593.75)
Euro Dollar Spread Chart from Bar Chart
Contact your Daniels Trading broker by phone or email to place this trade.
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
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