Stock and Options Trading

Guides and Strategies

Tag: trading

Options Trading For Gold and Currencies

If you’ve chosen correctly an options trading strategy, it make highly profitable. Currencies and commodities can be assets. This is one way to access options of many different assets. The other way is to spot trade these markets.

Many assets like currencies, and commodities such as gold and copper are closely related. With a sharp instinct, a trader using an options trading strategy can see correlations between these currencies and commodities

Speaking about correlations between currencies and commodities, South Africa is one of example. This country is the world’s largest exporter of gold. In the international market gold prices can be correlated with currency. Like currency Rand with gold prices.

goldSo, when you find the spread between gold prices and RAND to be unusually wide and out of its historical relationship, you can simultaneously trade a gold call and a rand put in case the spread between RAND and gold prices is negative or the other way around.

Maybe you can see similarly , the spread between Australian Dollar and Gold prices widens and becomes out of sync with its historical relationship. This is one of many examples of options trading strategies. When You look carefully, the other options trading are the spread between the Australian Dollar (AUD) and Reuters Commodity Index widens.

Reuters Commodity Index is a useful index that shows general commodity prices. What you are doing is betting on the fact that the spread is wider than the historical levels and is expected to narrow down to the normal.

You can also take options in currency markets and try to profit from a price at a future level. If you notice the dollar has somewhat overshot, maybe due to a data release in the USA, then you could look to use options to trade at lower risk than taking an actual position in the spot market. However as with all investments, due care should be taken when using options. Although the risk can be limited, it is still a way of losing money, as well as making money. Make sure you understand how it all works first.

What Is The QQQ Etf?

The QQQ ETF tracks 100 of the largest domestic and non financial international companies. Ranking is based on market capitalization in the Nasdaq stock market. By definition it is a broad index fund that excludes financial based companies.

While the QQQ is heavily weighted in technology stocks, it is not considered to be a tech fund. It has always been associated with technology stocks and the technology sector. Many technology companies will list their stocks on the Nasdaq market, particularly the largest more successful companies in the world. Since QQQ is focused on the Nasdaq, it is not surprising that it is overweight to some degree in technology related equities.

Diversity has always been important to many investors. While QQQ avoids financials, it has diversified into Biotechs and some consumer stocks such as Starbucks Corp. (SBUX). With a good mix of consumer, biotech and technology investments, QQQ may be destined to outperform over the long term. This investment strategy has served it well since 2013. QQQ has outperformed the Dow Jones Industrial average over the past three years.

The future appears to be bright for QQQ. The world is increasingly dependent on technology and this trend appears to be accelerating. Biotech is also expected to do well as aging baby boomer appetites for life extending and quality of life demands increase. Drug makers and biotechs are well positioned to meet these demands. Technology companies are also developing solutions to meet the needs of aging baby boomers in addition to the worlds increased demand for technology solutions.

© 2018 Stock and Options Trading

Theme by Anders NorenUp ↑