Friday, November 24th, 2017

Timing Options Trades

Timing options trades is to a degree a contradiction in terms. After all one buys options in order to have the opportunity to buy or sell an underlying equity at the time of one’s own choosing. However, an options series has a starting date and it has an expiration date. If you [...]

Trading Interest Rate Options

US Treasury yields are inching up as traders expect the Federal Reserve to cut back on its quantitative easing program as soon as next month. The Fed has been buying $85 Billion worth of US Treasuries a month which has kept interest rates low and helped US industry, the housing market, and the economy in [...]

Trade Japanese Stock Options

An effective means of trading stocks in the current Japanese economic recovery may be to trade Japanese stock options. The economic policies of Japan’s current Prime Minister, Shinzo Abe, have led to a fall in the value of the Yen, a rise in exports of now-cheaper Japanese goods, increased consumer optimism and spending, and a [...]

Trading Agricultural Futures Options

Producing and buying agricultural products can be risky. Prices can rise rapidly if there is a threat to supply and fall equally fast if there is an overabundance. People need to eat so there is a fairly constant demand. A constant concern for production is the weather. The threat of drought in the American Great Plains, the Ukraine, Brazil, or Argentina can drive up soybean, corn, wheat, and cattle prices. Excellent weather across North America is predictive of abundant harvests of wheat from Texas to Alberta and a fall in wheat prices. Trading agricultural futures options is a common way to hedge risk for both producers and buyers of agricultural products. A farm co-operative may buy calls on corn futures whereas a meat processor may buy calls on pork bellies. They both buy options to hedge risk .