— Brian R., Orlando

Want to be our next Superconference Success Story?

Details here:

===> http://www.optionsuniversity.com/iscript.php?3440_A97897_21729

Brian’s trading results are evidence of what can happen, when you align yourself with true trading experts, and trade with them LIVE.

Successful trading these days demands cutting-edge strategies using real-world techniques not found in most textbooks.

And now, you have the rare chance to get the “best of both worlds” by attending our brand new Online Forex and Options Trading Superconference.

We’re proud and excited to be one of the Chosen Experts and Speakers at the upcoming Online Forex and Options Trading Superconference, taking place on December 15, 16 and 17, 2009.

You’ll discover trading strategies and tactics used by myself and some of the top traders in the world. And you can see the ACTUAL TRADES we would make in a LIVE Trading Room.

Yes, that means you can profit along with us, the experts!

The sponsors – Options University and OU Forex Trader – held a preview webinar last night to give you an overview of how things will work at the online conference.

And… more importantly… they identified the “Mystery Lineup” of the Top Forex and Options Trading Experts who will be your “Sherpa Guides” to excellent trading at the conference.

So if you missed that webinar, I’d advise watching it as soon as possible. And then get registered for this event, to take your Forex and Options trading to the next level in 2010.

Here’s the link to the webinar replay…

===> http://www.optionsuniversity.com/iscript.php?3440_A97897_21729

What if you could spend three full days “looking over the shoulders” of some of the savviest, most successful options and Forex traders in the world, while they’re trading…

…Listening as they explain in great detail how they identify the mega-trades that make a real impact in their own trading and investment portfolios…

All from the comfort of your living room!

Head to this web page for more details:

===> http://www.optionsuniversity.com/iscript.php?3440_A97897_21721

There are only so many traders that we can accommodate in the LIVE Trading Room.

So I’d advise reserving your “virtual seat” as soon as possible.

WHAT IS A REDUCED MARGIN SPREAD?

Because of perceived lower volatility, exchanges grant reduced margins on certain types of spreads. Spreads consist of being long in one or more contracts of one market and short in one or more contracts of the same market but in different months—an Intramarket spread; or being long in one or more contracts of one market and short one or more contracts of a different market, and in the same or different months—an Intermarket spread.

DISTORTIONS ABOUT SPREADS

There are some distortions about spread trading that need to be dispelled. If we get them out of the way, I can show you the tremendous advantages spread trading has over any other form of trading.

It is said that spreads do not move as much as outright futures. I agree 100% with that statement. However, spreads trend much more often than outright futures, they trend much more dramatically than outright futures, and they trend for longer periods of time than do the outright futures. For these reasons you can make much more money with spreads than with the outrights.

The second distortion about spread trading goes like this: “You have to pay double commissions when you trade spreads.” Yes! You have to pay two commissions for every spread you enter in the market. So what? You are trading two contracts instead of one. You pay two commissions because you are trading two separate contracts, one in one place and the other in an entirely different place. Paying two commissions for two separate trades is hardly unfair. Let me tell you what is unfair—paying a round turn commission for an option that expires worthless. Why don’t you hear people complaining about that? You pay for a round turn, and you receive only half a turn. Doesn’t make a lot of sense, does it?

ADVANTAGES OF SPREAD TRADING

There are so many advantages to trading reduced margin spreads that I hope I don’t run out of room here before I can tell you all of them. Let’s begin with return on margin, i.e., yield.

Yield: As I write this, the margin to trade an outright futures position in soybeans is $1,050, whereas a spread trade in soybeans requires only $250, only 23% as much. If soybean futures move one full point, that move is worth $50. If a soybean spread moves one full point, that move is worth $50. That means either a 5 point favorable move in soybean futures or a 5 point favorable move in a soybean spread earns the trader $250. However, the difference in return on margin is extraordinary: In the futures the return is $250/$1,050=23.8%. For the spread, the return is $250/$250=100%. Think about that!

Leverage: This leads us to the next benefit of spread trading—with the same amount of margin, you could have traded 4 soybean spreads instead of one soybean futures. How’s that for leverage? Instead of making $250 on a five point move, you could have made $1,000. Reduced margin spreads offer a much more efficient use of your margin money.

Trend: Earlier I said that spreads tend to trend much more dramatically than outright futures contracts. Not only that, but they trend more often than do outright futures. I don’t have room here to show you the dozens of sharply trending spreads that can regularly be found in the markets, so we’ll have to settle for a recent one. You’ll have to take my word for it that this sort of trending happens frequently when trading spreads.

Opportunities: Because spreads tend to trend more often and more dramatically than do outright futures contracts, they offer more opportunities for earning money, and they do so without the interference and noise caused by computerized trading, scalpers, and market movers. Spreads avoid the “noise” in the markets. There are numerous reduced margin spread opportunities, enough to keep almost any trader busy. And it is the lack of interference by market makers and shakers that leads us to one of the most important advantage of trading spreads, whether they be reduced margin or full margin.

Invisibility: One of the primary problems with any kind of trading in the outrights, whether it be in futures or stocks, is that of stop running. The insiders love it when they can see your order. Even when your entry or exit is held mentally, they know where it is. They are keenly aware of where people place their orders. That is why they love Fibonacci and Gann traders. They know precisely where those people will place their orders. The same is true for anyone who uses one of the more commonly known indicators. The insiders fade moving average crossovers, and so-called overbought and oversold—regardless of which indicator is used to show either of those conditions. They know when prices have reached the outer limits of the Bollinger Bands, and they know the location of supposed support and resistance, etc. But with spreads, they have no idea of the location of your orders. You are long in one market and short in another. Your position is invisible to the insiders. They can’t run your stop, because you don’t have one. You cannot place a stop order in the market when trading spreads! Your exit point is entirely mental; it exists exclusively in your head. In that respect, spread trading is a more pure form of trading. It is the closest thing in trading to having a level playing field. Could that be the reason you hardly ever hear about spread trading?

Liquidity: Attempting to trade in “thin” illiquid markets is one of the surest ways to encounter serious stop running and bizarre price movements. However, other than occasional problems with getting filled, spread trading does not suffer from a lack of liquidity—which in itself creates more trading opportunities. I would never consider taking an outright position in feeder cattle. Feeders are a thin, illiquid market normally best left to professional interests. But a reduced margin (feeder cattle)-(live cattle) spread is something I look for all the time. Some of the moves in this particular spread are incredible. They are worth hundreds and even thousands of dollars per spread, several times a year. They are highly seasonal in nature due to the birth and growth cycles of cattle. The same thing is true of spreading both live and feeder cattle against lean hogs. These spreads are seasonal, which brings us to the next great advantage to spread trading – seasonality.

Seasonality: Whereas seasonality doesn’t always take place as planned, i.e., seasonality can come early, late, or not at all, but when it is happening, you can see it. It is obvious when a seasonal trade is working as expected. Seasonality is not subject to the whims of man. Seasonality is one of the strongest reasons for trading spreads. Crops are planted within a given period of time. Calves and piglets are born according to their birth cycle and they grow according to their growth cycle. Even futures based on financial instruments are seasonal, and many of them offer reduced margin spreads.

Backwardation: Along with seasonality comes the huge profits that can be made when an underlying goes into backwardation. This is true for any agricultural commodity as well as any financial instrument. I don’t have space here to explain backwardation, but when it occurs, which is commonplace, the spread between front and back months widens tremendously, thereby offering marvelous profit-making opportunities to the spread trader. As if that weren’t enough, the same opportunity becomes available when the period of backwardation ends and the relationship between front and back months returns to normal.

Probabilities: If we eliminate those trades in the outrights in which you get yourself whipsawed in a sideways market and maybe win or lose a little, the actual odds of winning on any trade is 50%. If you are long and prices move down, you lose. Conversely, if you are short and prices move up, you lose. It doesn’t matter how accurate is your trade selection, the bottom line is that your chances of being right once you enter a trade are one in two. However, when you enter a spread you are not primarily concerned with the direction of prices. Your primary concern is with the direction of the spread.

With a spread you can make money when both legs of the spread are moving up, both legs are moving down, when both legs are moving sideways but one more so than the other, or best of all, when the leg you are long is moving up and the leg you are short is moving down! As long as the leg you are long is moving better than the leg you are short, you will have a winning trade. There is only one situation in which you can lose with a spread, and that is to be dead wrong about both legs. So with a spread you can win even if you were wrong about the direction of price movement, as long as you’re not too wrong.

There are additional opportunities in spread trading, including spreads that require full margin. You can trade spreads with stock indexes, sector funds, and single stock futures. Did you know you can daytrade stock index and currency spreads? These are topics for another day and another time.

Unfortunately, either by accident or design, much of the truth of spread trading has been lost over the years. There are many more aspects to it than I have touched on here. Furthermore, there are some wonderful and inexpensive tools available that make spread trading a delight. Spread trading is one of the most relaxed ways to trade. It rarely takes more than 1-2 hours of your time each day, and more often than not, we are talking about only minutes per day to seek out and trade the wonderful opportunities that are available in reduced margin spreads.

Currency Options Available to Binary Option InvestorsCurrency option trading has been opened up to a whole new field of investors with the creation of a new type of transaction called a binary option. In days past the only people able to take advantage of the movement of currency option trading were big fish investors with millions of dollars in capital to trade and use as collateral. Not so any more.

Small Cap Day Traders Trade the Same Popular Cross Rates As Global FinanciersPeople with smaller (much smaller) portfolios now have the ability to make investments in the movement of currency cross rate changes using the binary option trading transaction I mentioned earlier. With as little as $100 an investor can open an account and quickly begin making transactions on the major currency option trading cross rates. Anyone who has ever wanted to trade Yen/Dollar, Dollar/Euro, or Dollar/Pound now has access to the same sorts of options trades that long time forex traders like George Soros have had.

Nasdaq Index, Microsoft, Google Options Also Day Trading on Binary PlatformTrades of this kind are not limited to currency cross rate options however. It is also possible to buy calls and puts on the direction of movement in major stocks and indices, such as Google and or the Nasdaq index. Making investments in these sorts of high return, short horizon securities used to require large capital amounts just to open options accounts.

Low Capital, High Yield, High Turnover and High Reliability Day Trading SystemThese other sorts of stock based binaries are nice but for me the big thing has been the ability to work on currency option trading without the exorbitant capital requirements and without the high commissions and fees that go with it. I place trades in the market, and at the top of the hour I get my payouts. It is pretty simple when you think about it.

One of the Options University’s most highly anticipated product launches is the Forex Mastery Series. People have been blogging about it for weeks and it finally becomes available this Tuesday, 11/17/09.

Forex Mastery is a three part trading system for the currency markets. It was created by the Options University team of Forex experts, all veterans of the market with years of experience and personal trading success. The Options University team takes their extensive knowledge in the field to teach others how to be successful as well.

Forex Mastery is generating so much publicity because people have heard how simple to use it is by itself; and the software tools make it even simpler. The video modules are clear and come with many examples to show people how to trade in a simple fashion. Apart from helping people place high probability trades, ForexMastery can also help people manage their money and risk better and to become not only a more profitable but a more efficient trader.

When asked what the buzz is all about regarding Forex Mastery, Brett Fogle, President and founder of Options University states, “The risk of Forex trading is virtually eliminated and people can be consistently profitable trading Forex in as little as 12 minutes a day. It’s the secret Forex project we have been quietly working on for the past few months, known simply as Project X. It is, by far, our best training package we have ever produced, times ten. That’s a promise.”

Responding to the question of why Forex Mastery is different from any other training materials out there, Fogle stated, “I have gathered the greatest Forex talent available anywhere- a mathematician and a Forex trading veteran, who has actually cracked the hidden levels of the Forex with what some are calling magical precision. Plus an interpreter who has translated the rules of this mathemetician into simple and easy to use software that shows people how and when to enter and exit their Forex trades safely, profitably and consistently, nearly every single time and in any time frame. Whether you have never traded Forex before, or you are a professional Forex trader, Forex mastery will be a game trader for Forex trader.”

The Options University, based in Boca Raton, Florida, has been named as one of Inc. Magazine’s Top 500 privately held companies in the United States. In only four years, the Options University has grown from zero employees to 25 full-time and virtual staff worldwide, with over $3 million in revenues for 2007.

According to Inc.com, “(Options University) is uniquely qualified to become a market leader in this industry based on the quality of the instructors, many of which are former professional floor traders and market makers. It teaches people how to trade options through online trainings, web seminars and home study courses.” Responding to why they believe the Options University is growing, Inc.com states, “More brokers offer options, but not as many investors understand what options are. The service has become popular with baby boomer retirees who have a retirement account but aren’t happy with their returns.

For more information, visit: Forex Mastery Official Page

Below are some of the options trading strategies that you may consider.

Popular strategies to trade options include:

Bullish on volatility Bearish on volatility Selling Credit Spreads Bearish strategies Selling Covered Calls Bullish strategies Neutral or non-directional strategies Calendar Straddle Strangles

The above list is in no way an exhaustive list, there are plenty of other strategies that you may employ. The purpose of this article is to just give you a small taste of some of the possibilities. Below I expand on a few.

Selling Credit Spreads – If you are looking for a strategy that does not involve marrying your stock options career, then this is one you could consider. There is nothing worse than following a strategy that requires you to monitor the market for every minute of the trading day. You can complete what is involved with this strategy in around an hour a week and if done correctly you might be able to increase your portfolio by around 10-15 per cent monthly. They are great returns that really put to shame what the banks are offering. To execute this strategy you need to know how to carry out a trend analysis on the market. Of course the scope of this article does not allow me to cover this further. You are best advised to join the mailing list on this site.

Bullish Strategy – If you are expecting the underlying stock of an option to increase then you could go with this strategy. The Bullish options trading strategies are brought into play when you as the trader expects the underlying stock price to increase in value. You need to consider just how high the stock price is likely to go and within what time frame. The most likely strategy choice for a bullish trader is a simple call buying strategy. This is quite popular with beginners. Other bullish strategies include Covered Straddle, Bull Calendar Spread and The Collar.

Complex Strategies – These include such things as iron condors, butterflies, straddles and strangles. Just where do they come up with the names used in strategies for options trading? Strange aren’t they? The ones I have listed here if followed correctly are generally low risk while at the same time being highly likely to be profitable. The disadvantage is that they are expensive, either due to the fact that you are trading expensive options or thanks to high brokerage fees which come about due to the number of trades involved.

You should remember that options are quite versatile trading instruments. With such great flexibility this is where many people get it wrong. They think that the more complicated an option trading strategy is the more successful it can be. In fact it can be quite the opposite. The more complicated the strategy the more open you could be to risk while at the same time limiting profit potential.

As with any strategy you employ with your options trading business and treat it with respect. Don’t trade live until you have given it a good test using a practice account. Only then should you consider running with it using your real money.

When learning how to trade options it is always advisable to only use risk capital when trading with real money. This means only use money that you can afford to lose if you have trades that go against you. There you go that just touches the surface of options trading strategies. Of course you will want to learn more and then select a strategy to trade your options using a test account. From there who knows?

Always remember to not let things get out of hand. If you are learning a new strategy only trade with one contract at a time. If you go overboard you will soon find yourself out of control and headed towards disaster. Options trading is not a race. You have time on your side and you should make the most of it. The market will still be here tomorrow.