V. 8:13 (507-508): Quick Scans: FUTURES AND OPTIONS STRATEGY GUIDE

FUTURES AND OPTIONS STRATEGY GUIDE FUTURES AND OPTIONS STRATEGY CHARTS

Chicago Mercantile Exchange

30 South Wacker Drive

Chicago, IL 60606

(312)930-1000

Price: $3 per pair

Promotion departments at the exchanges have the difficult job of educating an audience that ranges from the abjectly ignorant to the extremely sophisticated. Few span the range as well as the Chicago Mercantile Exchange's (CME) marketing division, particularly on the high end, where its Marketing Perspectives Topics on Options and Financial Futures is a must-read for sharp individuals and professional managers looking for how-to information on developing trading and hedging strategies. Now, CME marketing has come up with an incredible product that covers ground I haven't seen covered as well, or at all, in hundreds of books and articles on options.

The Futures and Options Strategy Guide shows you how to select an options position, given your outlook on the underlying and volatility, and then goes on to give you 42 pages of how to follow up that position as things change. Best of all, it does the follow-up graphically. That just isn't available anywhere else.

Figure 1 is what the world usually presents you: how to get into an initial position. This ground has been covered hundreds of times, so you can get the details from any text (or the CME's Strategy Chart booklet, available for $1). However, one of the strong points of using options is the ability to modify the position over time to add protection or enhance profitability. Figure 2 shows you how that would be done for something tricky, like a ratio call spread. If, for example, volatility were rising on you and your outlook had gone bearish, you'd convert by liquidating the calls and selling the underlying futures.