Options on Futures, Workbook: Step-by-Step Exercises and Tests to Help You Master Options on Futures New Trading Strategies

by Summa, John F.; Lubow, Jonathan W.

• ISBN13: 9780471436430
• ISBN10: 0471436437
• Edition: 1st
• Format: Paperback
• Copyright: 2002-01-18
• Publisher: Wiley

Summary

Increased marketplace volatility and the expanding size of capital markets have led to an explosion of interest in options on futures. What makes these instruments so attractive is that they allow traders to profit from movements in the markets using little up-front capital and plenty of leverage. At the same time, they provide an excellent hedge against the risks associated with capital market investments. This book demystifies these notoriously difficult-to-understand instruments and provides state-of-the-art strategies and tools for making the most of options on futures. John F. Summa (New Haven, CT) is a CTA and cofounder of OptionsNerd.com, an online service providing market commentary, trading advisories, and assistance with trading system development. Jonathan Lubow (Randolph, NJ) is cofounder and Vice President of Trader's Edge, a futures and options brokerage.

Author Biography

JOHN F. SUMMA is registered as a commodity trading advisor (CTA) with the National Futures Association, and is cofounder of OptionsNerd.com, a Web site devoted to providing market commentary, trading advisories, and educational support to options traders. He has published numerous articles on options trading in a variety of publications, including Technical Analysis of Stocks &amp; Commodities magazine. Mr. Summa, a former professional skier, holds a master&#146;s degree in economics from the New School for Social Research and currently operates Summa Capital Partners, LP, a commodity pool hedge fund based in Connecticut. <BR> JONATHAN W. LUBOW is cofounder and Vice President of Trader&#146;s Edge (www.atradersedge.com), a futures and options brokerage based in Madison, New Jersey. He has worked on the floor of the Chicago Board Options Exchange (CBOE) and has had uninterrupted registration with the National Futures Association since 1990. Prior to forming Trader&#146;s Edge, he was the top performing broker at Carr Investments for five straight years. Lubow holds a degree in history from Dartmouth College.

Table of Contents

Introduction	p. 1
Questions
Trading Options the "Write" Way	p. 5
Why Trade Options on Futures?	p. 14
SandP 500 Futures Basics	p. 20
The Option Pricing Story	p. 26
Understanding SandP 500 Options	p. 32
The Long and the Short of an SandP Credit Spread	p. 39
Simulating Margin Requirements for an SandP Credit Spread	p. 47
Parameters of Profitability of SandP Credit Spreads	p. 55
Commodity Futures and Options Characteristics	p. 63
Selling Strategies for Commodity Options	p. 70
Putting Theory into Practice	p. 77
Synthetic Call Strategies for Commodities	p. 82
Using Put-Call Ratio Analysis to Find Timely Entries	p. 87
Answers
Trading Options the "Write" Way	p. 97
Why Trade Options on Futures?	p. 103
SandP 500 Futures Basics	p. 107
The Option Pricing Story	p. 113
Understanding SandP 500 Options	p. 120
The Long and the Short of an SandP Credit Spread	p. 126
Simulating Margin Requirements for an SandP Credit Spread	p. 138
Parameters of Profitability of SandP Credit Spreads	p. 144
Commodity Futures and Options Characteristics	p. 150
Selling Strategies for Commodity Options	p. 156
Putting Theory into Practice	p. 163
Synthetic Call Strategies for Commodities	p. 168
Using Put-Call Ratio Analysis to Find Timely Entries	p. 173
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