Today’s trading activity lacked any extraordinary movement. The implied volatility in Coffee and Wheat are below their 30 Day Historical Volatility. Does this provide any opportunities to initiate a position with a particular trading bias? Granted, those markets have had sizable moves recently, but looking for options trading with a potentially low volatility is not a bad piece of information to be aware of. Wheat certainly continues to be an interesting market and along with Coffee, S&P and Crude Oil, are markets which provide interesting options strategies. The Chart below highlights today’s essential information. Each day I review the information provided below and analyze the options settlements to help determine the appropriate method for establishing positions. A risk/reward analysis should always be considered before initiating positions. I can be reached at 212-383-9453 or at fred.oltarsh@libanman.com to discuss position ideas. The chart represents some useful information pertaining to tonight’s settlement prices. Most of the columns are self explanatory but hereis the key to the lesser known columns: RSI is the Relative Strength Index and measures a market’s overbought or oversold status. Anumber greater than 70-80 would be considered potentially overbought while a number below 30-20 might be considered oversold. The 10 and 30 HV are the 10 and 30 day Historical Volatility for the Commodity. IV refers to the Implied Volatility of the At-The-Money Option. The ATR and $-ATR refers to the 20-day Average Trading Range of the Futures Contract and the Dollar Range for the Contract . Much of this information is a simple way of analyzing Implied and Historical Volatility and is a concise review of the markets.For help interpreting the numbers or understanding how this type of analysis will help your trading call us at 212-383-9453.
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About the authorFred Oltarsh is a Proprietary Trader for a New York City Futures and Options Group specializing in Options Trading. He was an options market-maker on the floor of NYBOT/NYMEX for more than fifteen years and Head of Risk Management at NYBOT/ICE Futures for seven years. In addition to his Proprietary Trading, Fred has developed the Options Strategy Network a website geared towards Options and Futures Education and Training. The site provides access to Individual and Group Tutoring from Options and Futures experts with significant trading and risk management experience. Traders putting their money on the line can benefit from the knowledge and trading skills that we convey in the Options Traders' Essential Outline. For more information, please call me at 917-656-1767 or email me at info@optionsstrategynetwork.com. |
