Carley Garner's Blog: What's new on DeCarleyTrading.com, page 49
October 17, 2013
Sell December Euro Option Strangles
****There is substantial risk of loss in trading futures and options.**
****Past performance is not indicative of future results**
On the radar:
* Euro seasonals, technicals and fundamentals are mixed. Let's sell strangles into recent volatility.
Sell December Euro strangles
Well, when the government shut down so did many of the markets (namely Treasuries and currencies). Nonetheless, now that the debt ceiling deal has finally been approved currency traders are unwinding some of the flight to quality bets.
We also seem to be experiencing some fresh bulls in currencies such as the Euro in light of the U.S. shenanigans. In other words, there is an anti-U.S. dollar trade going on. However, we suspect that today's knee jerk reaction will soon be met with resistance....after all, the grass isn't necessarily greener in Europe. Accordingly, we feel like the rally will be limited but any selling should be supported by year-end buying as multi-nationals prepare for 2014.
We like the idea of selling strangles in the Euro using the December $1.40 call option and the $1.33 put. this gives us approximately 300 ticks in either direction and leaves us with a slightly bearish bias. You should be able to collect about 70 ticks or $875 per strangle. The trade makes something if prices are between $1.4070 and $1.3230 at expiration but the max profit of $875 before transaction costs occurs if the futures price is between $1.4000 and $1.3300 (see chart above).
Keep in mind that this premium collection trade will help to hedge the time value erosion on our U.S. dollar position.
As always, there is theoretically unlimited risk in option selling.
Let us know if you would like us to put one on for you, or if you have any questions.
If you are enjoying this trial, click here to open a trading account to work with DeCarley Trading and/or use the state of the art futures and options trading platforms available to our brokerage clients.**
DeCarley Trading
Twitter:@carleygarner
info@decarleytrading.com
1-866-790-TRADE(8723
www.DeCarleyTrading.com
www.ATradersFirstBookonCommodities.com
Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data.
**Seasonality is already factored into current prices, any references to such does not indicate future market action.
**There is substantial risk of loss in trading futures and options.**
October 7, 2013
Vote for DeCarley to win a Super Bowl commerical!
We probably won't win an Emmy anytime soon...but we have a shot at a Super Bowl Commercial :) Check out our video submission in the Intuit Small Business, Big Game promotion and take a second to vote for DeCarley!
Click here
October 3, 2013
Buying Opportunity in Corn Futures?
****There is substantial risk of loss in trading futures and options.**
****Past performance is not indicative of future results**
On the radar:
* Specs are holding record net short positions at a time in which we aren't sure when the next USDA report will be released. This could be a good time for them to start covering! We are corn bulls on this dip.
"Everyone" is bearish corn, but it might be time to buy.
Corn prices have been in a sharp downtrend, but we can't help but feel like all of the "bad" news is out. The market, and traders, have already come to terms with the fact that we are sitting on a bumper crop in what has been a nearly perfect growing season. However, with the short corn trade overloaded we suspect there aren't many traders left to sell....but it might not take much to entice them to lock in profits.
Similarly, the harvest lows are due in October...and here we are. In our view, the risk is to the upside; hopefully the bears realize this as well and begin to cover what are record breaking net short positions.
In August, we briefly mentioned that a dip in December corn under $4.40 would trigger our interest. We've been patiently waiting for prices to come to us. Unfortunately, they've move lower on relatively low volatility so our "go to strategy" of selling puts doesn't seem to be the most efficient means of speculation. We like the idea of going long futures contracts at a nibble pace with the idea of adding at lower prices if they are seen.
For most of you, it probably makes sense to use the mini corn futures simply because it leaves plenty of margin for dollar cost averaging and gives you the ability to hold a long position for a long period of time with mitigated risk (and stress).
We'll consider adding on should prices decline to levels closer to $4.00. Our initial upside target will be $4.75 but we cannot rule out a run into the $4.95 area.
Let us know if you would like us to put one on for you, or if you have any questions.
If you are enjoying this trial, click here to open a trading account to work with DeCarley Trading and/or use the state of the art futures and options trading platforms available to our brokerage clients.**
DeCarley Trading
Twitter:@carleygarner
info@decarleytrading.com
1-866-790-TRADE(8723
www.DeCarleyTrading.com
www.ATradersFirstBookonCommodities.com
Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data.
**Seasonality is already factored into current prices, any references to such does not indicate future market action.
**There is substantial risk of loss in trading futures and options.**
September 24, 2013
Tips for Futures and Options Traders
Unfortunately, there isn’t a Holy Grail trading method that guarantees profits. However, there are a few simple guidelines that if understood and implemented, can have a significantly positive impact on trading results. Here is our list.
IF THE MARKET GIVES YOU A GIFT, TAKE IT
It is easy to confuse trading prowess with luck, but the truth is nobody can predict price movement with exact certainty. Instead, we are all making educated guesses in an attempt to beat the market, which entails facing less than favorable odds of success. As a result, if you happen to be in the right place, at the right time, to catch a substantially favorable market move, it is generally a good idea to take the money and run.
Ego will often argue that there could be additional monies to be had, but the fact is markets can take profits away as fast, or faster, that it gives them. Don’t over think your position; take a profit and walk away.
Click here to continue reading this article on Trader Planet!
*THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS!
September 20, 2013
Get long the dollar with protection
****There is substantial risk of loss in trading futures and options.**
****Past performance is not indicative of future results**
On the radar:
The market expected taper, the Fed didn't deliver....the result was a QE capitulation. Time to get bullish the greenback?
Synthetic Trade in the DX Futures
The seasonal low for the dollar (and corresponding high for the Euro) is typically a week or so from now. However, given yesterday's massive (over) reaction to the Feds non-action, it seems like the dollar might be ripe for a reversal a little earlier this year.
The dollar index traded on the ICE exchange hasn't been this "cheap" since February of 2013 and is beginning to look attractive on the chart. However, it is possible we fall a little further to test support on a weekly chart moderately under 80. Accordingly, we aren't willing to catch the falling knife without protection.
We like the idea of going long a December DX futures contract, and then purchasing a November DX 80 put to limit the risk of the trade. Depending on fills, the total risk should be about $900 before transaction costs. This includes about $550 for the insurance and the distance between the futures price (about 80.35 and 80.00).
If the dollar drops again, we'll consider taking a profit on the long put and letting the futures contract ride.
If we are right and the dollar index finds footing, a 50% retracement of the recent drop would mean 81.70. At that point the futures contract would be profitable by about $1,350, but the protective put will have lost value to work against profits.
DeCarley Trading
Twitter:@carleygarner
info@decarleytrading.com
1-866-790-TRADE(8723
www.DeCarleyTrading.com
www.CurrencyTradingtheBook.com
Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data.
**Seasonality is already factored into current prices, any references to such does not indicate future market action.
**There is substantial risk of loss in trading futures and options.**
September 13, 2013
Basics of Commodity Pools
Commodity pools are essentially the mutual funds of the futures industry. By definition, a commodity pool is a private investment structure, typically a limited partnership, that combines the contributions of multiple investors to be used in futures and option trading in the commodity markets. Simply put, a commodity pool is a fund that operates as a single entity to speculate in the futures markets on behalf of the fund’s investors. Another way to look at a commodity pool is as a specialized hedge fund that deals only in futures, or options on futures, traded on organized futures exchanges and is registered as such with the appropriate US regulators.
The term “commodity pool” is a legal word assigned to this type of fund by regulators. Commodity pools are regulated by the Commodity Futures Trading Commission (CFTC) and the National Futures Association (NFA). This is in stark contrast to traditional mutual funds, or even hedge funds, which answer to the Securities Exchange Commission (SEC).
The person, or entity, responsible for managing the commodity pool’s assets and the trading activity within the fund is referred to as the commodity pool operator (CPO). A CPO differs greatly from the alternative form of managed futures, a Commodity Trading Advisor (CTA), in the manner that client funds are allocated and traded. As mentioned, a CPO pools investor funds to create a single trading account. Trades are executed within the commodity pool account with profits and losses allocated to participants based on the size of their contribution to the fund. A CTA, on the other hand, instructs his clients to open individual accounts; any trade executed by the advisor on behalf of his clients is done so directly in each individual client account.
Continue reading about commodity pools...
September 10, 2013
Crude Oil Traders have Options
Crude Oil Speculators have "Options"
Crude oil is perhaps the most notorious commodity market but it is also among the most treacherous. Nonetheless, speculators are drawn toward the leverage and volatility crude oil provides...and, more importantly, the stories of riches made and lost by its participants.
Before risking your hard-earned money speculating in crude oil, it is important to be aware of all speculative avenues available. For instance, it is possible to trade oil via ETF's that attempt to track the price of crude such as the USO (United States Oil); alternatively, investors can place bets on crude oil via the stock shares of firms that are correlated to crude oil prices, such as COP (Conoco Phillips); or traders can directly speculate in the price of oil through the purchase and sale of futures and options contracts. Despite the stock market alternatives, I believe futures, and options on futures, offer the only trading venue that provides the efficiency and the market access necessary to effectively trade price fluctuations in crude oil.
Value in trading Crude oil futures vs. stocks and ETFs
My preference for futures might be influenced by the fact that I am a commodity broker, but it goes much deeper than that. Here are a few key advantages to futures over equities.
Longer Trading Hours/More Market Access
Crude futures open for trade Sunday evening at the NYMEX (New York Mercantile Exchange) branch of the CME Group and, for all intents and purposes, oil futures trade around the clock until Friday afternoon. On the contrary, ETF and Stock traders are able to execute trades during the official day session of the NYSE, and similar exchanges, as well as in the designated pre-open and after-market sessions (which are often illiquid). The entire span of trading is limited to approximately thirteen hours...or less.
Read the full article...
September 4, 2013
Mad Money features our futures market analysis
[image error]Most crude oil and gold traders are scouring Middle East headlines tabbing for clues of the next price move. However, the truth is we have no historical norm or pattern to help guide us through the Syrian crisis. Even if you are able to predict the decisions and actions of politicians, there is no telling how the markets will react. Accordingly, we feel like it is a good idea to step away from the Syrian crisis and look at the historic seasonal patterns of these commodity markets, along with basic technical analysis techniques, for guidance.
One of our recent issues of the DeCarley Perspective focused on this topic was featured on CNBC's Mad Money on September 3rd. The DeCarley Perspective is a publication distributed exclusively to DeCarley's brokerage clients. If you are interested in being part of the loop, open a trading account today!
Click here to check out the archive of the September 3rd Mad Money segment featuring DeCarley analysis!
You will find the original DeCarley Trading newsletter text here:
DeCarley Perspective emailed to our brokerage clients: http://mad.ly/249304
If you haven't already enjoyed a trial of DeCarley Trading newsletters, you can register here. **If you would like to open an account to trade via one of our state-of-the-art trading platforms, or with an experienced broker, click here.
DeCarley Trading, a division of Zaner
1-866-790-TRADE(8723)
info@decarleytrading.com
http://www.ATradersFirstBookonCommodities.com
http://www.DeCarleyTrading.com
***THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS!**
August 29, 2013
Margin Call Management Webinar
Click here for free registration
September 17th @ 1:50 PM Eastern – Carley Garner of DeCarley Trading
Coping with Margin Calls: Don't liquidate or wire funds, adjust your trade!
Carley discusses how margin is levied and enforced. We'll also discuss how margin calls are triggered, what actions a trader can take, and how traders can use options to adjust risk and margin without adding money or liquidating positions. Don't throw in the towel, adjust! Come see how it might be possible to adjust the position delta through the purchase or sale of options to alleviate a margin call issued by your futures and options broker.
Click here for free registration
Click here to open a futures and options trading account to work with one of our state-of-the-art trading platforms or an experienced commodity broker.
**DeCarley nor the Zaner Group endorse non-affiliated speakers at this event. Their presentations do not necessarily represent the opinions or view of DeCarley/Zaner.**
August 19, 2013
Booyah! DeCarley and Cramer on Natural Gas Futures
Natural gas prices have been consistently declining for several months due to a historical supply glut resulting from improvements in technology, namely a practice of shale extraction known as fracking. However, it is quite possible that all of the bearish news is known and priced in. Seasonals and chart patterns suggest this down in the dumps commodity could soon be on the mend.
One of our recent issues of the DeCarley Perspective, was featured on CNBC's Mad Money on August 15th. The DeCarley Perspective is a publication distributed exclusively to DeCarley's brokerage clients. If you are interested in being part of the loop, open a trading account today!
Click here to check out the archive of the August 15th segment featuring DeCarley analysis!
You will find the original DeCarley Trading newsletter text here:
DeCarley Perspective emailed to our brokerage clients: http://mad.ly/5f68f3
If you haven't already enjoyed a trial of DeCarley Trading newsletters, you can register here. **If you would like to open an account to trade via one of our state-of-the-art trading platforms, or with an experienced broker, click here.
DeCarley Trading, a division of Zaner
1-866-790-TRADE(8723)
info@decarleytrading.com
http://www.ATradersFirstBookonCommodities.com
http://www.DeCarleyTrading.com
***THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS!**
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