Option Trade of the Day 

by: Commodity Trading School

 

Date: 05/09/08  

Estimated Update: 05/12/08

Company:

CommodityTradingSchool.com

Phone:

1-800-258-1179

Email:

thedean@commoditytradingschool.com

Website:

www.CommodityTradingSchool.com
 

May 8

Euro Currency- The market is holding the bottom of the range and could or should head back towards its high range around 159.00. On the other hand, if support breaks we could continue to sell off so we are creating an option strategy that can capitalize on more than one scenario. 1X2 Call Ratio Buy the June 154.50 call and sell 2 June 157.00 calls for a cost of $300. This trade is profitable from 154.75 up to 158.75 as shown, with the maximum profit being realized with the market at 157 which would result in an intrinsic profit of 2.50 X $1250 ($3,125). The risk below 15475 is limited to the cost of the trade, the risk above 158.75 is unlimited however we will be looking to adjust the short leg as soon as we get a sign as to the markets intention.


 

* There is a substantial risk of loss in trading futures and options.

 

PLACING CONTINGENT ORDERS SUCH AS "STOP LOSS" OR "STOP LIMIT" ORDERS WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS. SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.

 

Past performance is not indicative of future results.

The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.