The DeCarley Perspective Trading Newsletter

Sell December Euro Option Strangles

Learn to trade commodity futures and options


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

****Past performance is not indicative of future results**

On the radar:

* Euro seasonals, technicals and fundamentals are mixed.  Let's sell strangles into recent volatility.

Sell Option Strangles in the Euro Currency Futures Market

Sell December Euro strangles

Well, when the government shut down so did many of the markets (namely Treasuries and currencies).  Nonetheless, now that the debt ceiling deal has finally been approved currency traders are unwinding some of the flight to quality bets. 

We also seem to be experiencing some fresh bulls in currencies such as the Euro in light of the U.S. shenanigans.  In other words, there is an anti-U.S. dollar trade going on.  However, we suspect that today's knee jerk reaction will soon be met with resistance....after all, the grass isn't necessarily greener in Europe.  Accordingly, we feel like the rally will be limited but any selling should be supported by year-end buying as multi-nationals prepare for 2014. 

We like the idea of selling strangles in the Euro using the December $1.40 call option and the $1.33 put.  this gives us approximately 300 ticks in either direction and leaves us with a slightly bearish bias.  You should be able to collect about 70 ticks or $875 per strangle.  The trade makes something if prices are between $1.4070 and $1.3230 at expiration but the max profit of $875 before transaction costs occurs if the futures price is between  $1.4000 and $1.3300 (see chart above).

Keep in mind that this premium collection trade will help to hedge the time value erosion on our U.S. dollar position. 

As always, there is theoretically unlimited risk in option selling.

Let us know if you would like us to put one on for you, or if you have any questions.

If you are enjoying this trial, click here to open a trading account to work with DeCarley Trading and/or use the state of the art futures and options trading platforms available to our brokerage clients.**

DeCarley Trading
This email address is being protected from spambots. You need JavaScript enabled to view it.

Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data.

**Seasonality is already factored into current prices, any references to such does not indicate future market action.

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


DeCarley Trading on Twitter

Carley Garner Trading Books

  • Higher Probability Commodity Trading, new Carley Garner book

    Higher Probability Commodity Trading, new Carley Garner book

    According to Phil Flynn, Fox Business News contributor, this is Carley Garner's "masterpiece"! Order from Amazon today! "A great read for both beginner and advanced commodity traders. Carley nails the seemingly impossible task of leveling the playing field by imparting vital concepts in easy to digest bites ...she doesn't leave out the harsh realities and heartbreak many overzealous speculators face." -- JON NAJARIAN, co-founder "I love the book... it's an MBA in trading for the
    Read More
  • Commodity Options the Book

    Commodity Options the Book

    It isn't free, but it's close! If this book saves you 2 ticks, you've recouped your investment.   Commodities are hot, as Jim Rogers would say.  Stagnant stocks and the massive bull rally in raw commodities have lured much of the attention away from Wall Street and toward down-town Chicago.  It is difficult to turn on the television or open the newspaper without being reminded of the impact that commodity prices have on our daily lives.   Traders
    Read More
  • A Trader's First Book on Commodities

    A Trader's First Book on Commodities

    The Simple, Practical, 100% Useful How-To Guide for New Commodities Traders   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 her extensive experience teaching traders, Garner shows how to
    Read More
  • Currency Trading in the FOREX and Futures Markets

    Currency Trading in the FOREX and Futures Markets

    Get a copy of Carley Garner's latest book at, or any major outlet! "Once again, Carley Garner demonstrates her ability to boil down complex concepts for individual traders. Trading Currencies in the FOREX and Futures Market will put budding currency traders ahead of the curve with its unique blend of the basics and some refreshingly unexpected material." ~ Karris Golden, Traders Press® "Carley is a smart trader and broker; she understands the markets and the importance of
    Read More

Newsletter Trial