OptionPundit

Category: FutureOptions

  • Will US Dollar Continue To Strengthen?

    The US dollar index rose quickly over the past few trading days. Other major currencies like the EURO, Pound, Aussie etc weakened against the dollar and I am tempted to short them. However I am hesitant to do so as I noticed that the dollar index is approaching a resistance zone (see the red box in the attached chart). If the dollar index rally falters at resistance, other major currencies may cease to weaken and shorting them will then prove to be a bad decision. If the dollar index slices through resistance easily, I may miss some opportunities but I rather play safe and wait.

    Income Via Future Options

    To me, the only currency that is moving in a clear direction now is the Japanese Yen, which I mentioned in a previous post.

    If the dollar index pushes through resistance and continues its climb, EURO and AUSSIE would become prime candidates to short. I will watch the dollar index closely and provide updates in due course.

    Cheers,
    Ethan

  • Is Crude Oil Bottoming?

    Crude oil has fallen more than 50% since May of 2014. It is now approaching a 15 year supportive trend line that can be traced back to 1999. This line says that support may be found in the vicinity of $45-$47. This is also a price range OP has been mentioning on his tweets. As I write this, oil is trading at $48.26. We are very close.

    Is Crude Oil Bottoming?

    However, we have not seen any price action that says the buyers are coming back. If this trend line does not hold, the next target will be $40.

    (Try Income Through Future Options FREE for 14 days)

    As crude oil moves into these regions of significant support, the risk reward of shorting oil becomes less and less attractive. I will be looking for a bounce or some form of consolidation over the next few weeks.

    Cheers,
    Ethan

  • More Downside for The Canadian Dollar?

    The September Canadian futures are in a down trend both on the weekly and daily charts. Recently the Canadian dollar has fallen dramatically and is now consolidating in the vicinity of 0.95. If you refer to the attached weekly chart, you will notice that this level was previously acting as support back in Nov 2012, Oct 2012 as well as Aug 2010. This is a significant support level and if this level is breached, there is potentially significant downside.

    The daily candlesticks have been exhibiting indecision at this level and so far, the price action points to more downside than upside pressure.

    Aggressive bearish traders will be looking to sell calls or establish put debit spreads now while more conservative bearish traders may want to see a break in the support before acting.

  • Just Two Trades Paid for 12 Month’s cost

    While on one hand, equity markets are moving pretty much sideways thus benefitting OP Income Newseletter, Futures and commodity options are offering unparralled opportunities too. Just look at recent moves in grains and metal markets. Gold is still recovering from the massive move it experienced during last few weeks. Crude oil is another example. Currencies expecially JPY, GBP, Euro are pvoviding some good opportnities too. An option trader today has mulitple options to choose from to add to his strategic portfolio of trading styles and instruments.

    OP Income Newsletter (OPN) is continuing to track towards my goal of 2x the SPX retrun in 2013. Another premium service that we started last year, Income Through Future Options (IFO), is doing equally well.

    OP Income Newsletter (OPN) is focused on equity and indices options’ trading via NON-DIRECTIONAL strategies that benefits from rise and fall of IMPLIED VOLATILITY. It has been consistently delievering superior performance for the mast 65 months and has tested a raging bull (2006-2007), fearsome bear (2008-2009) and again another bull market (2009-2013). OPN is probably one of the very few options trading newsletter that has such a long history. It is an honour and pleasure to see a lot of traders modeling their trading strategies based on what they learnt at OptionPundit. Strategies and approach that are used can be scaled-up and are diversifiesd enough to cater to that month’s need. Here are results of the past six months-> Oct’12 +11.9%, Nov’12 +10.4%, Dec’12 +23.9%, Jan’13 +15.4%, Feb’13 +2.3%, Mar’13 +15.3% and we are doing equally well for the current month.

    It has a NO PROFIT, NO FEE promise i.e. if OPN information doesn’t make money in your first month, you will get a full refund. Learn more about OPN.

    Unlike OPN, Income Through Future Options (IFO) is a DIRECTIONAL information service. It WAITs for the price set-ups to mature and as soon as entry points are triggered a trade idea is shared. The key here is WAIT and Set-up completion. A lot of time, traders can’t wait. If you are one of those traders who need to trade everyday regardless of low winning probability or if you like to anticipate the set-ups and start trading even before it is matured, then IFO is not for you. But if you are one of those, who like to let price action to take lead and who would prefer high porbability set-ups, then IFO can deliver great results. For example, recently, just two trades, first a gold bearish and then a bullish gold trade paid for almost entire years’ worth of subscription fee. That assumes only 1 spread per trade!!! Excellent results from Crude oil, euro will then just be bonus. The exact trades, with exact entry/exit can be found here. You can try it for FREE for 14 days and thereafter it is ONLY US$ 97 per month. (Prices are revised upwards from $49 to $97 per month from July 22, 2013)

    This year is not the year to wait on the sidelines. Take advantage from the exceptional moves that we might observe this year.

    Trade carefully, Trade Profitably,

    OP

  • How Do I Trade Future Options Using Price Action

    Trading future options is a different strategic play vs trading options on equities or indices. While there are differences, there are similarities as well. Below article will provide basic idea of how and what kind of trading set-ups we are looking for when placing directional trades on Futures utilizing various option trading strategies. Please read and let us know if you have any questions, feedback via posting in the comment section.

    Getting Clues to Market’s Next Move

    Is it possible to trade or read the markets without indicators? Can traders really get a better grasp of market strength or weakness without indicators? Of recent years, more and more traders are going back to the basics and interpreting market direction or strength with only price movements. Although I do not make my trading decisions exclusively on price movements, I must say that I get a lot of clues about market’s next possible move from reading price alone.

    As markets climb higher or tumble, they seldom move in one straight line. Markets usually move in a zig zag manner and it is this manner of movement that provides directional clues for alert trader. From this point on, for ease of reference, I shall refer to this manner of movement as market structure.

    Market Movements

    Timing the Markets Without Indicators

    We often hear or read that markets will make higher highs in an uptrend and lower lows in a downtrend so how do we make use of this to time the markets? The principle is actually quite straight forward. For example, when a weekly chart is showing higher highs and higher lows, the daily chart is likely to exhibit the same behavior.

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  • How to Profit from Future Options- IFO Weekly Update

    Futures markets especially Corn, Wheat and Crude have been buzzing rather actively during past few months. As part of our Income from Future Options (IFO) service, our strategy has been to wait for the best set-ups that increases our probability of success and as soon as our set-up emerges, then we go for it. (Try IFO FREE for 14 days, thereafter US$97/- per month) (prices are revised upwards from Jul 22, 2013).

    Here is the weekly outlook for 3 markets that we are monitoring for set-ups to emerge. Usually this discussion is shared with Members only. This week we are sharing it with all.

    CORN

     Corn has been consolidating and forming a bullish formation for weeks now. Latest USDA report showed just how bad the situation is in corn. Soon after the report, CORN futures spiked but then settled for lower. As of now, Dec futures are still below Friday’s low. I was actually waiting for a bullish breakout to trade it to the upside. But on Friday, we had a big down day with a false breakout. Now the question is if the bulls have lost it and the bullish pattern invalidated. Should corn break the low at 774, I will have little faith left in the bulls.

    Potential Trade Ideas 
    I am waiting for the bullish pattern to be invalidated to play corn to the downside. As corn can move very quickly in either direction, I will only take the trade if there is a close enough stop to limit my risk. Close enough stop meaning corn doesn’t have to move a lot against me to prove me wrong. This is an aggressive setup.

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