Why Use Spreads on Almost All Futures Options Trades? – Part 2, Ratio Spread

In part two of this short series on spreads, I will discuss the strategy behind the Ratio Credit Spread. We will use the term “ratio spread” when discussing this particular spread.

Why Use Spreads on Almost All Futures Options Trades? – Part 1

Unlimited risk is a term that doesn’t sit well with most non-professional traders. There are a few excellent ways to limit or almost limit the risk involved in selling futures options. We will discuss why spreading is possibly the best and most advantageous way for the average trader to approach options.

Why I sell options

First and foremost, it is a proven fact that 75% to 80% of all options held to expiration expire worthless.

Thoughts on Selling Naked

Thoughts on Selling Naked

Naked options are by far the riskiest investments in the commodity arena. Even outright contracts can at least have a stop loss entered on them, which will get you out automatically if the position goes against you.

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What are these so called earnings plays

What are these so called earnings plays

What are these so called earnings playsEarnings Plays are trades we do on stocks that are set to report their quarterly earnings. This is a binary event that typically causes premium to increase prior to the event. We look to sell premium just before the event with...

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