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Strong Forex Market in Pre-Market Options Trading

Options Trading — Tue, 13 Jul 2010 13:19:58 +0000

Sponsored LinkOptions trading looking up as strong forex market appetite for risky currencies is driving S&P 500 and major US market index futures higher this morning. Retail traders obviously won’t get the opportunity to participate in the morning pre-market rally – so instead we’re lurking on the sidelines with an eye on the forex market. At the open we’re looking for decisiveness in the retail forex market to determine what the post-open movement will be. Yesterday we say the pre-market activity acting against the retail trade however it is looking like both retail and institutional investors are on the risk-positive side. As always, looking carefully at the risky currencies AUD, EUR, CAD, and NZL versus USD, CHF and Yen. Strong USD, Yen, (and to less extent) CHF look for S&P 500 reversal. Otherwise it’s going to be a strong Up day. As before, our overall intermediate term bias remains negative – a market high today may provide an opportunity to pick up a longer duration put option as a “flash crash” hedge. Once you own it leave a trade trigger (or trailing sell order) on it for a tidy gain should May 6th repeat itself and forget about it. Premiums [...]

Options Trading Signal: Bombs Away

Options Trading — Tue, 29 Jun 2010 11:54:25 +0000

Our daily options trading signal for today inevitably has to do with the events in Shanghai overnight with that market dropping 4% on what has been described as a massive share sale. This risk-averse activity is reflected in the early morning forex cross pairs, marking a strong sell signal. US markets tend to lead rather than follow – will be interesting to see whether the pre-market futures hold at 0.3% down. If you have a favorite stock you like, today might be a great day to put in an order for one of those “it’ll never get filled” prices. Today just might be your day. Alternatively selling cash covered out of the money put options (selling a put and holding cash in case of execution) is a way to take some premium in hand in the hopes that those options expire worthless. If they do get executed, you end up buying shares for a steep discount from today’s price. As always, if you don’t have access to traditional put and call options, there is always a binary options account. Have You Subscribed to Free Our E-Newsletter Yet? Get Trading Ideas Sent Right to Your Email Inbox as We Come Up [...]