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- Commodity Broker Redefined
Vertical Option Spread Trading Pros and Cons

Are Vertical Spreads all they are Cracked up to be?

By Carley Garner

 

One of the new buzz words in the option industry is the vertical spread.  Although they’ve been around for as long as option trading, popularity of the strategy has been on the rise due to historically challenging market volatility and a more sophisticated trading community.

Option buyers look to vertical spreads as a means of lowering their cost and risk of a particular trade.  Similarly, option sellers seeking to collect premium as an income strategy might choose to implement vertical spreads to limit risk and lower margin.  Nonetheless, we believe that in many cases trading vertical spreads might come with more baggage than benefits.  Like any other strategy, there is a time and place for vertical spreads, but in my opinion they should not be the staple of a trading portfolio. 

Vertical Spread Overview

By definition, a vertical spread is an option strategy in which a trader makes the simultaneous purchase and sale of two options of the same type and expiration dates, but different strike prices.  A buyer of the spread would be purchasing the more expensive leg of the spread, which is the option with the strike price...

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What Can DeCarley Trading do for you?

 

What can we do for you?  If you answered "YES" to any of these questions, we might be the right commodity broker for you. 

1.  Are you trading on your own at a deep discount futures broker and consistently losing money?  We cannot guarantee that you will make money trading with DeCarley,  but whether you prefer self-directed online trading, or broker assisted order entry, we can guarantee that we will work hard to give you the information that you need to increase your odds of success.  If you let us, we strongly believe that through DeCarley Trading client newsletters and with our multiple years of experience, we can help you to achieve your goals by encouraging patience in market entry as well as utilizing trading strategies with higher probabilities of success.  If you are already struggling to make money, what do you have to lose? 
 
2. Are you struggling with platform choices, margin variations, and the confusion of data vendors and order routing?  We've done the leg work for you!  Just let us know what type of trader you are and what you priorities will be; we will be more than happy to point you in the right direction in regard to choosing an appropriate platform and clearing arrangement.
 
3. Do you have a full time job, but want to trade futures and options? Let DeCarley help you monitor the markets and your trades.  We are available nearly 15 hours per day throughout the trading week.  All the while we are available to give quotes and market commentary over the phone and even send emails and text price alerts*.
 
4.  Are you trading savvy, but not familiar with the mechanics of the commodity options and futures markets? Let us help you navigate the markets by steering you clear of illiquid contracts and offering "tricks of the trade" when it comes to the best price execution.  We have direct access to the open outcry pits to execute options and option spreads, most discount online firms can't offer that.   In volatile conditions, this could make a significant difference in fill quality! In addition, our relationship with floor brokers enables us to provide our brokerage clients with opinions and commentary derived directly from those standing in the trading pits.
 
5.  Are you an option seller that can't seem to find a cooperative brokerage firm?  Many brokerage firms frown upon short option selling accounts simply because they tend to involve low trading volume and theoretically unlimited risk.  However, we believe short option trading (the right way) provides traders with attractive odds of success and promotes a client base that will be around for the long-haul.  Accordingly, we have worked hard to provide our clients with favorable clearing and margin arrangements for short option trading that both online and broker assisted traders might have trouble getting on their own or with other brokers.
 
6.  Do the flashing lights of a commodity trading platform encourage you to over-trade your account and in turn promote trading losses and massive transaction fees?   Some of our clients are experienced traders with years of market analysis and strategy under their belt.  However, they find that placing trades through a broker, as opposed to clicking and trading online, is a useful mechanism to control the human tendency to stray from a trading plan or strategy or even become too aggressive (over-trading).  If paying a few dollars more per round turn can avoid paying thousands of dollars in excessive discount trading commissions and market losses, it is money well spent!
 


DeCarley Trading offers experienced and dedicated brokerage services at competitive commission rates (email us for details on Online Pro rates, you might be surprised).   We aren't the cheapest, but we aren't far off and we work hard to deliver the service you deserve!  Click here for details on the services we provide. Does your brokerage do this for you?

If you would like to open a trading account to work directly with Carley Garner or to trade online using one of our state-of-the-art trading platforms, click here

 

For info on, or to purchase, any of Carley Garner's trading educational books visit http://www.currencytradingthebook.com/#!carley-garner-books .

DeCarley Trading
1-866-790-TRADE(8723)

 

* Minimum account balance or commission for price alert service.
**THERE IS SUBSTANTIAL RISK OF LOSS IN TRADING FUTURES AND OPTIONS!
 
Second Edition of Carley Garner's Commodity Book

A Trader's First Book on Commodities by Carley GarnerThere is a new version of "A Trader's First Book on Commodities" by Carley Garner of DeCarley Trading!

Although it has only been a few years since the original version of “A Trader’s First Book on Commodities”, we have seen dramatic changes in the futures and options industry. The most profound change has come to light in the aftermath of two major futures brokerage firm failures. Similarly, improvements in technology and competitive intra-day position margin standards have had profound impacts on the markets, and those trading them. Here are a few highlights of the Second Edition additions:

- The new reality of the commodity markets and the impact increased volatility has had on traders

- Discussions of the collapse of two major commodity brokers and the long term impact on traders and the industry as a whole

- Improvements in market access due to...

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Read our latest piece in the Fall issue of TraderPlanet Journal

Trade Futures and Options Like a GirlSee our "Trade Like a Girl" quiz in the Fall TraderPlanet Journal!

“Girls” believe in pressing their luck in the markets, even if they are enjoying relatively easy gains now? 

Answer: FALSE

Beginning traders sometimes confuse skill with luck.  There are times in which you will be in the right place at the right time to make extraordinary profits possible.  If this happens to you, take the money and risk off of the table. 

Regardless of what we think that we know, or even what others think that we know, trading boils down to making an educated guess.  If you happen to be the lucky beneficiary of a windfall profit, don't get greedy or expect that the gravy train will continue.  Letting your ego fog your logic may lead to a situation in which a big winner becomes a loser.

“Girls” attempt to keep past trades where they belong; in the...

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E-mini Futures Day Trading

Day Trading Time Frames and Emotional Strategies

 

Continue reading this article on TraderPlanet!

 

Day Trading the ES on TraderPlanet.comThere are plenty of compelling reasons to prefer day trading in the ES (e-mini S&P futures). For starters, it is a highly liquid and leveraged product and the ease of exiting by the close of trade eliminates overnight risk.  Further, profits (ideally) and losses are supercharged and fast.  As great as this might sound to the inexperienced, the difficultly of the practice is largely underestimated.

 

Day trading the ES is most likely one of the most challenging endeavors a trader could embark upon.  This is because there is...

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Who is DeCarley Trading?
Futures, Options, Integrity with DeCarley Trading

 

DeCarley Trading LLC was created with customer service in mind. We understand that there are hundreds of futures and options trading brokerage firms and there are an unlimited number of choices in terms of commission, service and execution.  DeCarley doesn’t expect your business but we would love the...

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Zaner360 Trading Platform Tutorial

We are proud to offer FREE access to the Zaner360 Futures, Options and FOREX trading platform to DeCarley Trading clients.  Although our brokerage clients have access nearly 20 trading platforms via their DeCarley account, we believe that the Zaner360 is an optimal choice for the average trader. 

The Zaner360 is capable of offering traders quick and efficient order entry with the advanced strategy and charting capabilities today's futures, options and FX traders have come to expect.

To view this Zaner360 platform tutorial one section at a time, please visit our YouTube playlist

 

 

If you would like to open an account to trade with DeCarley using this platform, please click here.

 

 

If you would like to open an account to trade with an experience broker, or with another trading platform please contact us for deails. 

 

 

DeCarley Trading (a Division of the Zaner Group)
1-866-790-TRADE(8723)
info@decarleytrading.com
 

*There is substantial risk of loss in trading futures and options. 

 
Free Access to DeCarley Trading Webinars

Review Recorded Archives of Carley Garner's Option and Futures Trading Classes

Learn Futures and OptionsClick here to enter the DeCarley Trading webinar vault

DeCarley Trading is dedicated to educating traders about the risks and rewards involved in trading futures and options.  We have compiled an archive of classes covering topics ranging from "Getting Started in Futures" to an overview of Carley Garner's Book "Commodity Options".  Here is a list of some of the topics discussed:

  1. The benefits of trading futures over equities
  2. Key differences  between trading options on futures and options on stocks
  3. Do's and don'ts of commodity option trading
  4. Selling options
  5. Trading option spreads
  6. Trading like a "girl" through conservative market choices, strategy and position sizing
  7. Synthetic option trading
  8. And more!

Click here to enter the DeCarley Trading webinar vault

 
Like DeCarley Trading on Facebook

 
A Trader's First Book on Commodities

The Simple, Practical, 100% Useful How-To Guide for New Commodities Traders  

A Trader's First Book on Commodities by Carley Garner

Before you trade commodities, you'll need significant practical knowledge of the associated risks and market characteristics. That's where this book comes in. You won't find boring theory or bewilderingly complex trading strategies here. Instead, you will find specific guidance on accessing commodity markets cost-effectively, avoiding common beginners' mistakes, and improving the odds of successful trades.

Drawing on...

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Free Premium Content

DeCarley Clients are Provided Access to Complimentary Premium Content

Complimentary Premium Content for DeCarley Clients

 

 

Whether you are a technical analyst or a fundamental trader, having information at your fingertips is imperative.  DeCarley Trading clients will be provided exclusive access to complimentary educational and informational material in an attempt to give our customers the best possibility for trading success.   DeCarley Trading premium content includes: 

 

 

  1. DeCarley Trading's e-blasts (The DeCarley Perspective and the Financial Futures Report)  

  2. Free access to third party commodity research such as Hightower and Helms (click for details

  3. Premium articles and advanced strategies

  4. Instant message, text, and telephone access to Carley Garner throughout the trading day

 
Commodity News and Trading Strategy Portal

Futures and Options Commentary, Strategy, and Informational Portal

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FREE Commodity Research and Market Commentary
 

DeCarley Trading Brokerage Clients Receive Multiple Futures Strategy ReportsFutures Market Strategy and Analysis in Addition to DeCarley Newsletters! 

 
DeCarley Trading is constantly striving to provide traders with the highest quality trading education and research available.  After all, the success of our business is determined by the success of our clients!
  
Along with the DeCarley Trading newsletters you are familiar with (Financial Futures Report and The DeCarley Perspective...), we are excited to offer our active clients access some of the industry's most respected commodity and financial futures...
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A Trader's First Book on Commodities by Carley Garner

A Trader's First Book on Commodities by Carley Garner

 

Currency Trading by Carley Garner

Currency Trading in the FOREX and Futures Markets

 

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Full Service or Online?

The decision to trade online or through a full service broker will undoubtedly make a large impact on your bottom line.  However, the impact may or may not be what you had in mind.  If you aren’t ready to begin placing your orders online on your own, despite saving money on commission it may be the most costly mistake that you ever make.

While commission is baggage, a slightly higher rate it may be worth every penny assuming that your broker is truly giving you what you are paying for…reliable and efficient execution along with quality guidance in strategy and analysis.

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Choosing a Commodity Broker

Most traders that are in the market for a broker are concerned primarily with trading platforms, commission and the quality of information provided such as newsletters.  However, if you are in the market for a full service broker, you need to take your research one step further.  Not only do you need to find a firm that is capable of meeting your logistic needs, but it is crucial that you choose an individual broker in which you can properly communicate, are comfortable with their experience and most of all trust to help you on your journey to being a successful trader. 

 

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Choosing a Brokerage Firm

Deciding on a brokerage firm is a significant decision and shouldn’t be taken lightly.  Before committing to a firm it is imperative that you research their services, experience, trading platforms and commission structure but more importantly whether your trading style and personality will be compatible.   For example, a beginning trader shouldn’t look to a deep discount online brokerage firm simply because they likely won’t get the guidance that they will need as a novice.  Similarly, a seasoned trader wouldn’t want to choose a firm that focuses on high-end service with a hefty price tag. 

 

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Commodity Options

It isn't free, but it's close...If having this book saves you 1 tick, you have almost recouped your investment.

 

Order Commodity Options the Book by Carley Garner

www.CommodityOptionstheBook.com

Amazon

Barnes & Noble

 

 

Currency Trading

If you are going to trade currencies...You had better shorten the learning curve!

 

Currency Trading the book by Carley Garner
 
 

www.CurrencyTradingtheBook.com

Amazon

Barnes & Noble

 

A Trader's First Book on Commodities

Knowledge is the most valuable commodity. Don't sell yourself "short" when it comes to market education!

 

A Trader's First Book on Commodities

www.ATradersFirstBookonCommodities.com

Amazon

Barnes & Noble

 
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There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained on DeCarleyTrading.com was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided on this website is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed on DeCarleyTrading.com will be the full responsibility of the person authorizing such transaction.