Wednesday, September 19th, 2018

Interest Rate Options

In interest rate options trading traders are positioning themselves for a faster than previously expected rise in interest rates. As reported in Bloomberg, a faster rate rise is expected as evidenced by a change of the put to call ratio on interest rates from 1.9 to 3.2.
Options Wager
Investors in put options [...]

Interest Rate Put Options

With the possibility at hand that interest rates may fall, interest rate put options could be profitable. As with all options trading interest rate put options require a sound options trading strategy. Unlike trading options on stocks or commodity futures, trading interest rate put options do not have to do [...]

The Leverage of Trading Options

The leverage of trading options is perhaps its greatest attraction. With the simple investment of a premium a trader can nail down a price at which he or she will be able to buy or sell an equity, no matter high or low the price may go. The leverage of buying  and [...]

Technical Analysis of Options

Technical analysis of options tells the trader what the options market will do next. Analysis of stock and market sector fundamentals will give the trader and investor an accurate picture of the long term prospects of the underlying equity. Investors and traders will often buy the underlying equity based upon [...]

Profit from Interest Rate Options

Options traders take interest rates into consideration when trading options on stocks, commodities, and foreign exchange. However, it is possible to profit from interest rate options directly as well. Interest rate options are traded on the Chicago Board Options Exchange, CBOE. Options traders can purchase both puts and calls on the [...]

Trading Options on US Debt

Many traders might be interested in effective ways of trading options on US debt considering the apparent failure of the so called Super Committee to come to grips with the mounting US debt. Hedging risk with options is a common tactic in uncertain times like this. Trading options can also give traders a useful and [...]

What Are Options on Interest Rates?

Interest rate options are cash settled options on the yield of US Treasuries. What are options on interest rates good for and who trades them? They are European-style in that they are only settled on their expiration date although they can be bought and sold throughout the duration of the contract. Those buying interest rate [...]