Stocks & Commodities V. 32:3 (37): Futures For You by Carley Garner
Product Description
Futures For You by Carley Garner
STRANGLING FOR PROFITS? (PART 3)
If strangle traders can make money regard-less of market direction, doesn’t it provide the best odds of success?
In the previous two issues, I addressed the pros and cons of trading option strangles. This month, we’ll focus on the strategy of placing futures strangles.
Futures strangles differ dramatically from option strangles in that the reference to “strangle” applies to the trade entry orders rather than the trade itself. To illustrate, an option strangle is a strategy in which a trader holds open, and opposite, positions in calls & puts with the same underlying asset; those trading futures strangles are placing opposite orders to enter a futures contract with the intention of being filled on only one of them. This makes sense, because a trader cannot be long and short the same instrument simultaneously, but he can be positioned to attempt to profit from either a rally or a decline should one of them materialize.
STRANGLING FOR PROFITS? (PART 3)
If strangle traders can make money regard-less of market direction, doesn’t it provide the best odds of success?
In the previous two issues, I addressed the pros and cons of trading option strangles. This month, we’ll focus on the strategy of placing futures strangles.
Futures strangles differ dramatically from option strangles in that the reference to “strangle” applies to the trade entry orders rather than the trade itself. To illustrate, an option strangle is a strategy in which a trader holds open, and opposite, positions in calls & puts with the same underlying asset; those trading futures strangles are placing opposite orders to enter a futures contract with the intention of being filled on only one of them. This makes sense, because a trader cannot be long and short the same instrument simultaneously, but he can be positioned to attempt to profit from either a rally or a decline should one of them materialize.
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