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Strategies & Market Trends : Learn Options on Futures

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To: John F. Summa who wrote ()	6/24/2000 10:40:00 AM
From: John F. Summa	of 15

Cotton Calendar Spread On 6/23/00, we sold October 55 puts for 1.10 and bought December 55 puts for 1.10. This is a calendar option spread. We are selling the October option and buying the December option at the same strike price. We are doing this trade at even money, which means that we collect the same amount for the short option as we pay for the long option. Currently, October cotton is at 58.80 and December cotton is at 60.30. The idea behind this trade is that the October option will lose time value at a faster pace than the December option. The October option expires on September 15, while the December option expires on November 10. The current margin requirement for this trade is approximately $400. For all our 1999 and 2000 trades, you can go to atradersedge.com There is risk of loss trading options and futures.

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