Learn Options on Futures Message Board

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Strategies & Market Trends : Learn Options on Futures

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To: John F. Summa who wrote ()	6/24/2000 4:28:00 PM
From: John F. Summa	of 15

Update on our Natural Gas Call Ratio Write Due to the increased volatility and rising price of natural gas, the value of call options has increased dramatically. Although options that we previously sold for $1050 per are worth $1920 the long futures contract has gained over $5000. (You can go to atradersedge.com for the original trade recommendation.) Meanwhile, were the market upon expiration to be at the current 4.50 level, the trade would have a profit of $11,000 excluding commissions and fees. The higher the market goes the more negative our delta becomes. To lessen upside risk and increase profit potential we are placing Good Till Cancel orders in order to add additional long contracts at specific prices. Meanwhile, this trade can still be entered by selling the over valued $6.50 calls. Got any questions? Just fire away. This one is a bit tricky, but an excellent synthetic call ratio write combining the use of call and put options on natural gas futures, and the simultaneous use of long futures contracts. There is risk of loss trading options and futures.

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