We provide traders with the following types of option strategies.

Butterfly Spreads

An option strategy combining a bull and bear spread. It uses three strike prices. The lower two strike prices are used in the bull spread, and the higher strike price in the bear spread. Both puts and calls can be used.

This option strategy has limited risk and limited profit!

An example would be:

Buy 1 December Corn $2.40 Call

Sell 2 December Corn $2.60 Calls and at the same time

Buy 1 December Corn $2.80 Call.

Credit Spreads

An options strategy where a high premium option is sold and a low premium option is bought on the same underlying security.

An example would be buying a Jan 50 Crude Oil Call  for $2, and writing a Jan 45 Crude Oil Call . The net amount received (credit) is $3. The trader will profit if the spread narrows.

Debit Spread

An options strategy where a high premium option is bought and a low premium option is sold on the same underlying security.

An example would be buying a Jan 45 Crude Oil Call  for $5.00, and writing a Jan 50.00 Crude Oil Call for $2.00 . The net amount paid (debit) is $3. The trader  will profit if the spread widens.

Diagonal Option Spreads

An options strategy established by simultaneously entering into a long and short position in two options of the same type (two call options or two put options) but with different strike prices and expiration dates.

This strategy is called a diagonal spread because it combines a horizontal spread, which represents the difference in expiration dates, with a vertical spread, which represents the difference in strike prices. An example of a diagonal spread is the purchase of a December $20 call option and the sale of an April $25 call.

Naked Options

An option position where the buyer or seller has no underlying security position.

Sell 1 December Corn $2.40 Call

 Ratio Spreads

An option strategy in which an investor simultaneously holds an unequal number of long and short positions. A commonly used ratio is two short options for every option purchased.

A ratio spread would be achieved by purchasing one call option with a strike price of $45 and writing two call options with a strike price of $50. This would allow the investor to capture a gain on a small upward move in the underlying commodity price. However, any move past the higher strike price ($50) of the written options will cause this position to lose value.

Sample Reynolds' Futures Commodity Options Advisory Newsletter Please read the Disclaimer at the Bottom of the Page. Tuesday May 17th 2005 Good evening and welcome to this edition of  the Reynolds' Option Advisory Newsletter. We have 2 New Trade Recommendations for tomorrow, please see details below.  i)  July Euro Currency Ratio Option Spread Staying with the trend, we believe that now is the time to enter a July Ratio Put Spread  on the Euro Currency. The September Euro (which the July Options are based upon) is currently trading at 1.2685 and we now suggest : Buy 1 (or more) July 1.2400 Euro Currency Puts and at the same time on a Spread  Sell 2 (or more)  July 1.2250 Euro Currency Puts at even, or 'zero' entry cost to you. The Profit Potential on this Spread is $1875.00.  These Options expire July 8th 2005. ii)  September Orange Juice Bull Call Option Purchase It appears that O.J. is finally starting to move higher....let's try and move with this upward movement with an inexpensive Call Option(s) as described below. Buy 1 (or more) September 105.00 O.J. Call Options @ a cost of $2.00 ($300.) or lower.. This is your entire Risk. The Profit Potential, should we reach $120.00  would be $2250.00. September O.J. is trading at 95.00  today and these Options do not expire until August 19th 2005, giving us plenty of time for this trade to come to fruition. Good Luck and Good Trading and remember to Always Trade Humble, Bill Reynolds

.

Sample Reynolds' Futures Commodity Options Advisory Newsletter Please read the Disclaimer at the Bottom of the Page.   Monday May 9th 2005   Good evening and welcome to tonight's Reynolds' Option Advisory.   Please see details below.   August Gold Option Bull Call Spread Tomorrow morning please call your broker and advise that you have a Bull Call Option Spread and would like to : Buy 1 August Gold $440.00 Call Sell 2 August Gold $460.00 Calls at a Debit of $170.00 or less. The Profit potential on this trade is $2000.00. The June Gold contract closed today @ $429.50 leaving us very 'close to the money' on this trade. These Options are scheduled to expire July 26th 2005.   Bill Reynolds

.

Sample Reynolds' Futures Commodity Options Advisory Newsletter Please read the Disclaimer at the Bottom of the Page.   Thursday May 5th 2005   December Corn Call Ratio Option Spread    Good evening and welcome to this evening's ROA. We have one new Trade Recommendation, please see details below. Corn has been in the doldrums for awhile now.  There was a pretty good rally in the grains in February and March from which prices have now pulled back and are trading near support levels.  World corn demand in very strong but production is also planned to be good.  So to see significant increases in the price of corn, we will probably need a weather scare of some sort in the summer growing months.  The only way to get in on the trade for cheap, is to sell the time premium on way out of the money options so that we lower the cost of the options we buy.  So the new trade is:   Buy 2 December Corn 240 call and at the same time on a spread   Sell 4 December Corn 280 calls for 2 pts. debit or $100 US in market cost.  Place this as an open order.   The margin on this trade is currently ~$50 US per Spread. The potential return on this trade is 40 pts. or $4000 US back.     Currently December Corn is trading around 225 1/2. These options expire on November 22nd, 2005 so we have lots of time to work for us.   As always, Good Luck and Good Trading and remember to always Trade Humble,   Bill Reynolds

 

 

Sample Reynolds' Futures Commodity Options Advisory Newsletter Please read the Disclaimer at the Bottom of the Page. Monday May 2nd 2005 Good evening everyone and welcome to this evening's Reynolds' Option Advisory. We have one new Trade Recommendation for tomorrow, please see details below. Natural Gas Calendar Bull Call Option Spread This is a very interesting trade with limited downside and very good upside potential. The Margin on this trade is attractive as well, approx $450.00 per (3) positions. Tomorrow morning please call your broker and advise that you have Spread Order and would like to : Buy 3 April Natural Gas 9.50 Calls and at the same time Sell 3 January Natural Gas 14.00 Calls @ a Credit to you of 150, or $1500.00. Good Luck and Good Trading and remember to always Trade Humble, Bill Reynolds

 

Click Here For Your 3 Week Trial for only $2.95 U.S.

 

We're So Certain That The Reynolds Options Advisory Newsletter Will Be What You Are Looking For, We are Offering a Trial Subscription for Three Weeks To Kick the Tires. If you are not completely satisfies we will refund your subscription fee for the first three weeks.

 

The Reynolds Option Advisory Newsletter is published by Bill Reynolds. Bill is a Futures Trader and Branch Manager and Senior Commodity Specialist with Union Securities Ltd in Kitchener Ontario Canada. Bill has previously been employed by Refco, Nesbitt Burns, Midland Walwyn and Scotia Mcleod during his 19 year Commodity Trading career. Options are versatile and offer a wide range of positioning strategies. Bill employs such strategies as 'Ratio Spreading', 'Credit Spreads', 'Debit Spreads', 'Diagonal Spreads', and 'Naked Option Selling' to maximize return on capital. Bill makes use of the fact that most options expire worthless, by taking advantage of option sales in conjunction with long option positions to reduce risk and increase profits. Selling options is a clever trading strategy that is often overlooked by small investors, but is an indispensable tool for the professional futures traders.

 

Disclaimer

This analysis is the sole property of Bill Reynolds. The analysis in this report is accurate to the best of our knowledge. All opinions and conclusions expressed in this report reflect the judgment of Bill Reynolds as of this date and are subject to change. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement by Bill Reynolds to buy or sell any futures or option mentioned. Bill Reynolds does not accept any liability for loss or damage howsoever caused to anyone trading futures or options in reliance upon such information. Bill Reynolds or his officers and/or employees and/or affiliates may or may not have positions for theiown account in the futures and/or options contracts referred to herein.

 

U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

 

CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

About Us  Terms Of Use  Disclaimer   Privacy Policy 

Sitmap 1 2 3 4 Copyright © 1998-2005 ReynoldsOptions.com Last modified: June 16, 2005