Rolling Spot Forex Definition – The Immediate Nature of the Forex Spot Market

March 3, 2012 by  
Filed under Forex Trading

Often times peoples expectations about financial markets can lead to frustration if and when they decide to take the plunge and test the waters of a trading market in particular. For many people it is somewhat surprising that the securities transactions you want to do are not immediate. The standard stock market operator does not usually offers such a quick response. This type of reaction is usually immediate preview of a spot market.

While certain securities and commodities are traded on a spot market the most popular of all the spot markets is Spot Forex. So  is the question many have is, what is a spot market ? A spot forex trade involves either buying or selling a forex pair at a current rate. This involves a direct exchange between to currencies. Such transactions involve cash as opposed to a contracts and interest is not included upon the agreed transaction. Should you keep positions open you need to get into these pairs.

From another perspective – The current definition of a spot market is a market where you buy goods or cash, and sell immediately. As with the stock market, you may want to buy or sell a particular action once they have placed in the order in which brokerage firm, is a certain amount of time it takes to execute the purchase or sale. During this time, the value of the stock could go up or down and these movements could dramatically affect the profitability of their operation.

Rolling Spot Forex Spot Forex Market is a horse of a different color. Spot Forex market is somewhat misleading, because that is the only market rate quoted on currency. This means that if you see a profit potential in a currency that link and you want to enter before price changes, all you need do is buy the pairing. Once you submit the order, your transaction will be immediately executed. On the contrary if the trade goes south in a hurry, you can stop the trade as soon as you entered.

Spot forex trading is done electronically. This is convenient and necessary. Convenient, because you can perform operations on your computer virtually anywhere, anytime, day or night, it is necessary, because the Forex market has no central trading floor to speak of. It is a 24-hour a day market. Regardless of why the spot Forex market is the way it is, the immediacy of this particular market is what makes it so appealing and so very popular. Rolling Spot Forex Definition

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Options Trading Mastery: Getting Out or Rolling the Position

August 14, 2010 by  
Filed under Option Trading

The selection and management of a vertical spread are only two-thirds of the game. Closing out, rolling or morphing the position has to be analyzed and implemented with due diligence that was used in the selection and management processes. As for the closing of an extension called vertical, we find that there are three possible outcomes to be addressed. The spread can finish off the money-and void. For an extension call, this situation occurs when the action begins at or below the lowest strike spread. In this scenario, in order to close the spread, one would expire. Both options finish out of the money so no residual position will be left over. If the spread fully finished in the money, (to its maximum value) is, with the two options in the money, then the options are exercised. You exercise your long call and short the call will be assigned. They cancel each other out and was left with no residual position. This situation occurs when the stock price closes lower than the lower call strike involved in the deal. The scenario is difficult when the population is closed between the two strikes of the spread. This scenario, the closing share between the two strikes created a situation in which a strike by the winds being in-the-money, while the other end off-the-money. If both options expire in-the-money, both are exercised, a creation of a stock option during the creation in a short position against each other. This is not the case here. In this case, an option which is in the money “will leave a residual value position from the other option is off-the-money, may not compensate for the residual stock position created by the ending in money “option. There are two possible actions. Option number one involves the spread trade on expiration Friday shortly before closing. Because the purchase and sale of two options, you will probably have to cede some of their profits in order to close the position. Giving up a part of the benefits may be the best thing to do in order to avoid the risk naked, without limits. If only trade off the option in the money, “runs the risk (albeit short-lived because you are doing this late on due date of expiry of the month) that the population shakes and out-of -la-option suddenly becomes money-money. If that happens, now naked residual stock position. Of course, if there is still time, you could always trade off the option below, but it is too risky. However, if the population is a relatively safe distance from the out-of-the-money you may want to close only the option in-the-money and let the out-of-the option will expire worthless on money. The two factors to be considered are: the combination of the distance from the strike price of shares in connection with the short period of time for the stock to get there, and the amount of money saved by not buying out again of-the-money option. Remember, this is done by the end of expiration day. These options are only minutes of life left. So, knowing this, the risk is somewhat mitigated, but still nothing less. The problem is the proximity of the population outside-the-money option. If the population is close to the out-of-the-money option would be best advice for trading the spread at all. Again, as noted earlier, if the stock closes, either with the full spread-the-money, or totally out of the money, the position is adjusted through the process of exercise without leaving the residual position. If the stock price ends up between the two attacks, there will be a residual position. We discussed how to trade this position. Your second option is to trade and allow yourself to go through the process of revocation. You must remember that if you are going to accept a residual stock position, you should be able to afford it. So if you have July 10, 1950 calls the exercises and you will receive 1,000 shares at $ 50. 00 per share. Therefore, you must have $ 50,000. 00 in cash and / or margin in your account to receive the material. If you do not have enough cash and / or margin to accept delivery of the shares, then you should trade out of position before it expires.

Ron Ianieri is currently chief options strategist at Options University, an education company that teaches investors how to profit consistent with the options and limit risk. For more information, contact the University Options at http://www. optionsuniversity. com or 866-561-8227

Options Trading Mastery: Rolling the Position

August 14, 2010 by  
Filed under Option Trading

The selection and management of a vertical spread are only two-thirds of the game. Closing out, rolling or morphing the position has to be analyzed and implemented with the same diligence. As for the closing of an extension called vertical, we find that there are three possible outcomes. The spread can finish off the money-and void. For an extension call, this situation occurs when the action begins at or below the lowest strike spread. To close the spread, the investor would only expire. Both options finish out of the money so there is no remaining residual position. If the spread fully finished in-the-money (the maximum), and both-the-money options, both options are exercised. You exercise your long call and short the call will be assigned. They cancel each other out leaving no residual position. This situation occurs when the stock price closes lower than the lower call strike involved in the deal. Investors are a difficult scenario when a stock has closed between the two strikes of the spread. This creates a situation in which a strike by the winds being in-the-money, while the other end off-the-money. If both options expire in-the-money, both are exercised. One creates a long stock options, the other a short position cancel each other out. This is not the case here. The option is in the money, leaving a residual stock position. Since the other option is out of the money, can not compensate for the residual stock position created by the option expires in the money. Two actions are possible in this scenario. One involves the spread trade on expiration Friday shortly before closing. Because the purchase and sale of two options, you will probably have to cede some of their profits in order to close the position. This may be the best they can do to avoid the risk naked, without limits. If only trade off the option in the money, “runs the risk that the population shakes and out-of-the-money suddenly becomes an option-the-money. This risk is of short duration, because you are doing this late in the day of expiry month expires. If this happens, you are naked in the residual balance. If there is still time, you can always negotiate out of choice, but that is very risky. If the population is a relatively safe distance from the out-of-the-money option, you may want to close only the option in-the-money and let it expire worthless. The two factors to be considered are: the combination of the distance from the strike price of shares in connection with the short period of time for the stock to get there, and the amount of money saved by not buying out again of-the-money option. Remember, this is carried out by the end of expiration day. These options are only minutes of life left. The risk is somewhat mitigated, but still there nonetheless. The problem is the proximity of the population outside-the-money option. If the population is close to the out-of-the-money option, is better than trade outside the spread of everything. As said before, if the stock closes, either with full-spread-money or out-of-the-money, the position is adjusted through the process of exercise without leaving the residual position. If the stock price ends up between the two attacks, there will be a residual position. We talked about how to trade this position. Your second option is to trade and allow yourself to go through the process of revocation. You must remember that if you are going to accept a residual stock position, you should be able to afford it. If you have July 10, 1950 calls and exercise, which will receive 1,000 shares at $ 50. 00 per share. Therefore, you must have $ 50,000. 00 in cash and / or margin in your account to receive the material. If you do not have enough cash and / or margin to accept delivery of the shares, then you should trade out of position before it expires.

Ron Ianieri is currently Chief Options Strategist at The Options University, an educational company that teaches investors how to make consistent profits using options while limiting risk. For more information please contact The Options University at http://www. optionsuniversity. com or 866-561-8227

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