The trading strategy of purchasing a deep out-of-the-money call or put option has been referenced as purchasing a “lottery ticket”. Both present an opportunity for profits but with a low rate of success. Depending on how far out-of-the-money the strike price and time remaining until expiration, it would take a considerable move in the underlying futures market to profit.
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Creating a Futures Portfolio
At the end of the day, most traders and investors are searching for something that works. For them, this involves ways to limit risk while trying to extrapolate upside opportunities. But, the question remains: how can we find simple and effective ways to do this?
Price Pattern Basics: Reversal Formations
As discussed in my previous article, Price Pattern Basics – Triangle Formations, price patterns have been studied by traders to help forecast the markets next move. This article will focus on reversal patterns. A few of the most common reversal patterns include head and shoulder patterns, double tops, and double bottoms. Double tops are one… Read more.
Using Market Correlation Data to Diversify Your Portfolio
As most investors know, hundreds of strategies and ideas exist which can be used to capitalize on any market. Undoubtedly, everyone has a different way of putting his or her money to work. Because of the development of modern portfolio theory in the country’s best management schools, one investing behavior that every money manager encourages… Read more.
Poland to mint gold, silver coins to honor Pope John Paul II
Poland, the native land of Pope John Paul II, announced on Wednesday it will strike collector coins to memorialize its native son ahead of when he is blessed, the Associated Press reports. The European nation will mint 500 gold coins that are worth 1,000 zlotys apiece, or the equivalent of $350. Lesser-valued gold coins also… Read more.
The Wonderful World of Futures Spread Trading
When it comes to Futures Spreads, many traders ask us what is the benefit of spreading futures contracts. They want to know why we often choose to spread futures contracts instead of either being long or short a single futures contract or option, or use option spreads instead.
Stocks respond to improved unemployment data
Stock futures around the world responded favorably on Thursday to reports that first-time unemployment claims fell more than expected this week. The news on the labor front was encouraging because only a week ago, investors were dismayed when unemployment claims shot up far more than expected to around 500,000. This week, 473,000 workers filed for… Read more.
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