Futures and Options Traders Magazine - September 2008 - SHL Team.pdf

September 2008 • Volume 2, No. 9
PROFITING FROM OPENING GAPS
at key price levels p. 6
CRUSHES AND CRUNCHES:
Implications for grain futures p. 12
STRATEGIC STOCK TRADING —
with options p. 24
HEDGING A PORTFOLIO
with bear put spreads p. 18
TRADING ICHIMOKU
signals with options
p. 28
CONTENTS
Trading stocks with short options . . . .24
Short options provide a useful alternative for
traders who want to enter the underlying market
at more advantageous price points.
By Mark D. Wolfinger
Options Trading System Lab
Ichimoku and vertical spreads . . . . . . . . . .28
By Steve Lentz and Jim Graham
Futures Snapshot . . . . . . . . . . . . . . . . . . . . . .30
Momentum, volatility, and volume
statistics for futures.
Contributors . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Option Radar . . . . . . . . . . . . . . . . . . . . . . . . . .31
Notable volatility and volume
Trading Strategies in the options market.
Fading the opening gap . . . . . . . . . . . . . . .6
This intraday system captures brief reversals Futures & Options Watch
that often follow extreme highs and lows. COT extremes . . . . . . . . . . . . . . . . . . . . . . .32
By Art Collins A look at the relationship mercials
and large speculators in 45 futures markets.
From crunch to crush . . . . . . . . . . . . . . . .12
The credit crunch might be making its Options: Health care
presence felt in the unlikeliest of places — ponents . . . . . . . . . . . . . . . . . . . . .32
the grain market. Traders should prepare
themselves for a volatile season.
By Keith Schap
Hedging with bear put spreads . . . . . . . .18
Adding a bear put spread to a stock portfolio
creates a more efficient hedge than simply
buying puts.
By Tristan Yates
continued on p. 4
2 September 2008 • FUTURES & OPTIONS TRADER
The leader in rule-based trading just
broke one of its own rules:
Trade stocks for only
$ 99
6 .
per trade until 12/31/08
Now