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Forex Options Strangle System

  • #281
  • Mar 7, 2011 12:10pm Mar 7, 2011 12:10pm
Hi scattergood,

Great stuff! Have you looked into bull spread offered by Nadex? Check it out: http://www.igmarkets.com/fx/forex-bull-spreads.html

I have opened a live account with them, and looking into this fascinating bull spread strategy on Forex:
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  • #282
  • Mar 7, 2011 12:12pm Mar 7, 2011 12:12pm
Quoting lowenhardt
Thanks for the reply cspip, those margins are definitely smaller. Do you know if only persons not in the United States get cheaper margins (because of NFA regulations?) I am in the US, so I'm thinking they would make my margins higher.

Agent6488, have you received an email response about Ikon Prime/Prodigy yet? I have not. Would like to get the demo going.
I dont think it should make a difference where you are.

I am using the Ikon Prodigy demo, get it from here...

http://www.ikonfx.com/contents/Prodigy/Prodigy-466.html
  • #283
  • Mar 7, 2011 12:13pm Mar 7, 2011 12:13pm
Quoting fchaman
Hi scattergood,

Great stuff! Have you looked into bull spread offered by Nadex? Check it out: http://www.igmarkets.com/fx/forex-bull-spreads.html

I have opened a live account with them, and looking into this fascinating bull spread strategy on Forex:

Here is another thread for Bull Spreads...

http://www.forexfactory.com/showthread.php?t=173735
  • #284
  • Edited 12:27pm Mar 7, 2011 12:24pm | Edited 12:27pm
Quoting cspip
Here is another thread for Bull Spreads...

http://www.forexfactory.com/showthread.php?t=173735
Yes, I've seen that thread, but it covers only forex binary, not bull spread. I think you meant this link: http://www.forexfactory.com/showthread.php?t=263826

I am not a big fan of binaries as they are exteremely risky, only if you use them as a headging strategy.

On the other hand, bull spread trade has both limited risk and reward, the same as selling strangle options.

Basically, in bull spread trades, you are given a ceiling and floor. If you are selling bull spread, the ceiling caps your max loss, and floor limits your TP.

If you are buying bull spread, the floor caps your max SL, and ceiling limits your TP.
  • #285
  • Mar 7, 2011 1:02pm Mar 7, 2011 1:02pm
Quoting fchaman
Yes, I've seen that thread, but it covers only forex binary, not bull spread. I think you meant this link: http://www.forexfactory.com/showthread.php?t=263826

I am not a big fan of binaries as they are exteremely risky, only if you use them as a headging strategy.

On the other hand, bull spread trade has both limited risk and reward, the same as selling strangle options.

Basically, in bull spread trades, you are given a ceiling and floor. If you are selling bull spread, the ceiling caps your max loss, and floor limits your TP....
Yes, thats it.

Nadex is only available in the US, and not in UK, though IG Index/Markets did once offer them here too...(and they own Nadex)
  • #286
  • Mar 7, 2011 1:05pm Mar 7, 2011 1:05pm
Quoting cspip
I dont think it should make a difference where you are.

I am using the Ikon Prodigy demo, get it from here...

http://www.ikonfx.com/contents/Prodigy/Prodigy-466.html
Thanks, yeah I registered for the demo, the website said "Please check your email and download the Trading Platform.". The previous Ikon demo I registered for (Core Options) was emailed right away, I guess this one is a little slower.
  • #287
  • Mar 7, 2011 4:09pm Mar 7, 2011 4:09pm
Quoting lowenhardt
Thanks, yeah I registered for the demo, the website said "Please check your email and download the Trading Platform.". The previous Ikon demo I registered for (Core Options) was emailed right away, I guess this one is a little slower.

Heres the link:-

http://67.29.176.151/Rqpage/FxOnlineDownloadWOL.asp
  • #288
  • Mar 7, 2011 4:55pm Mar 7, 2011 4:55pm
They're usually pretty good on the live chat. Try that if you still have problems getting a demo account going. There should be no hold ups as it is now the live options system. Prime is now defunct, even though it didn't have the bugs that Prodigy has.

I believe they will just make you set up through the NZ or UK division to avoid the US regulations.
  • #289
  • Mar 9, 2011 9:59am Mar 9, 2011 9:59am
Thanks skoda I got on live chat and got the demo running. It's a pretty smooth platform, alpari's (fx bridge) seemed clunky in comparison (in my opinion, anyhow). Question, how has the withdrawal process been? It's surprising that there's no automatic withdrawal website function, you have to fill out a paper form and email it back.
  • #290
  • Mar 9, 2011 8:52pm Mar 9, 2011 8:52pm
Even though it's an international transfer, the funds are usually cleared in my account in about 3 days - which is faster than a normal international transfer. I did have my fair share of delays, but that was because I was sending my withdrawal requests to [email protected], as per the withdrawal form. Now I send it to [email protected] and it happens much faster.
  • #291
  • Mar 11, 2011 11:33am Mar 11, 2011 11:33am
Quoting MassDynamic
Hi Scattergood ,

Thanx for an awesome thread , just shows there are so many ways to skin this cat. I have a few questions and hope you will take the time to answer :
1)...
I don't have many answers on that but.. isn't 1.36 and 1.42 too narrow? EUR/USD has been jumping up and down quite alot.. and you think it will be in that range to the 6th of april?

I don't trade options (yet) but i probably wouldn't trade EUR/USD right now if there wasn't some really deep otm calls/puts.

This was just my taughts.. might not be good ones
  • #292
  • Mar 14, 2011 2:34am Mar 14, 2011 2:34am
Quoting smajdah
I don't have many answers on that but.. isn't 1.36 and 1.42 too narrow? EUR/USD has been jumping up and down quite alot.. and you think it will be in that range to the 6th of april?

I don't trade options (yet) but i probably wouldn't trade EUR/USD right now if there wasn't some really deep otm calls/puts.

This was just my taughts.. might not be good ones
Hi Smajdah ,

Thanx for the feedback , your comments are appreciated. I tend to agree with you that 1.36 on the down side was a bit low when I entered the trade but the upper call was a good 0.0450 pips away at that time.The power of this method to me seems to be the time decay. Currently the strangle is sitting with a profit of $ 2,000 if I were to buy back both the call and put today. This in essence means that if I am wrong and price does breaks through 1.3600 or 1.4200 I would still be able to make a handsome profit even though I am wrong.

This being a demo it does not really play on the emotions but if this were live I would probably have gone for a 0.0500+ pip buffer on both sides.

It comes down to a risk / reward play , i.e. bigger the buffer the smaller the premium that you get.

Regards
G
  • #293
  • Mar 14, 2011 9:51am Mar 14, 2011 9:51am
I read the thread and think timing once again is important.
I would like to toss out this idea and see what feedback comes.

Use a 1 hour chart and a 180 or 220 ema offset it by a fibo, say 144 or 233 on both sides. Use these two numbers as the strike prices check for the support and res. levels around there and wait to enter when the price is around the ema.

Regards,
sfish
  • #294
  • Mar 17, 2011 11:43am Mar 17, 2011 11:43am
Quoting MassDynamic
Hi Smajdah ,

Thanx for the feedback , your comments are appreciated. I tend to agree with you that 1.36 on the down side was a bit low when I entered the trade but the upper call was a good 0.0450 pips away at that time.The power of this method to me seems to be the time decay. Currently the strangle is sitting with a profit of $ 2,000...
EURUSD can move 600 pips in 3 weeks let alone in 6 weeks.
  • #295
  • Edited 7:00am Mar 18, 2011 5:34am | Edited 7:00am
Quoting MassDynamic
Hi Smajdah ,

Thanx for the feedback , your comments are appreciated. I tend to agree with you that 1.36 on the down side was a bit low when I entered the trade but the upper call was a good 0.0450 pips away at that time.The power of this method to me seems to be the time decay. Currently the strangle is sitting with a profit of $ 2,000...
True, it comes down to risk / reward play and your own opinion/strategy. But i feel that with a short strangle your intention is that the currency pair will remain inside your "barriers" and then get two profits. Not profit on one side and a loss on the other, even though it could happen.

If your strategy is 1profit 1loss maybe a long strange/straddle will be better since you speculate on a significant rise/decline?

Sfish: why even use those indicators? Use common support/resistance and trend lines?

These are only my thought ofcourse, would be nice if scattergood or skoda2008 told their opinion on this
  • #296
  • Mar 26, 2011 7:48am Mar 26, 2011 7:48am
I hope i don't write to much in the thread but I'm wondering if anyone has benefited from the volatility in currencies? Long straddle/strangle?
  • #297
  • May 22, 2011 5:18am May 22, 2011 5:18am
I started using this method 2 weeks ago (selling strangles) using binary options with XTB, with 3 days expiration period. for now, it's a success. i use 2x daily ATR and it gives me quite a return. it is definitely better than spot trading, where i was a net loser...
cheers
  • #298
  • May 23, 2011 2:07am May 23, 2011 2:07am
Dear G.,

Do you have a reason to think that selling strangles might work better with binaries than with spot and if so, why?

Thanks,

Lenoxer
  • #299
  • May 23, 2011 3:10am May 23, 2011 3:10am
Quoting Lenoxer
Dear G.,

Do you have a reason to think that selling strangles might work better with binaries than with spot and if so, why?

Thanks,

Lenoxer
I think you need much more discipline trading spot, emotions dictates your trading, while with options, binaries or vanilla, it's enough to figure the range where the price will stay for the time period.. of course I can be wrong and the price can break out, but for now it happend just once and I recovered the loss quickly..
  • #300
  • May 23, 2011 5:07am May 23, 2011 5:07am
Quoting gigiyoffee
I think you need much more discipline trading spot, emotions dictates your trading, while with options, binaries or vanilla, it's enough to figure the range where the price will stay for the time period.. of course I can be wrong and the price can break out, but for now it happend just once and I recovered the loss quickly..
How is XTB? The site looks kinda weird.. Why did you choose xtb? Ikon seems to be better but they don't have binaries though.
Have you tried the opposite from short strangle? ("betting" on volatility instead)

What are the difference between xtb:s binaries and betonmarkets?
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