Get your copy of Paul Forchione's book, "Trading Strangle Swaps". Learn techniques from a professional options trader to manage risk while speculating on futures markets.
Click here to view Paul's eBook
By using our website, you agree to accept our terms of use (click to read)
Term Structure
Volatility
Options fall into the category of being slightly undervalued in non-volatile markets in the weekly options report.
Notes:
Contract Size - 1,000 barrels.
Tick Size: Outright: dollars and cents with 0.01 points=$10
Trading Hours: CME Globex: Sunday - Friday 6:00 p.m. - 5:00 p.m. Eastern Time (CST).
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here to read a helpful tip about Live Cattle futures and options
Charts
Below are weekly & daily charts for reference.
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here on enlarging images
Strategies
Below is the starting position for a strangle swap. It's a variation to a standard iron condor structure which reduces Theta / Vega and flattens the current curve (today) to span a wide range while reducing both Theta / Vega components. It allows for time to adjust the spread structure if necessary as price moves within a reasonable range of daily volatility.
The % yield shown in the diagrams below represent an estimated return on margin from projected dates shown below. The structure has positive time decay which is an advantage over holding outright options.
