Trading strategies involving options and futures trading


The strategy is called a credit spread because the option that is sold has a greater value than the option that is purchased. The same type of trade can be executed on the put side. All examples are excluding commissions and fees.

Uncovered, or naked writing, involves selling a call OR put without entering into an underlying futures contract. The same type of trade can be executed on the put side. The contract size for Silver is ounces. The maximum risk on trading strategies involving options and futures trading credit spread is defined by the value of the width of the spread minus the premium collected at inception. In the case of a short put the premium is retained if the futures has moved higher, stayed the same, or moved lower, but not down to the strike price of the put.

Both options are out-of-the-money. A credit spread is a strategy that involves simultaneously selling an option and buying an option in the same month farther away from the market. Therefore, when a credit spread is initiated a net credit is received.

Therefore, when a credit spread is initiated a net credit is received. Uncovered, or naked writing, involves selling a call OR put without entering into an underlying futures contract. The maximum risk on a credit spread is defined by the value of the width of the spread minus the premium collected at inception. Both options are out-of-the-money. The trading strategies involving options and futures trading is called a credit spread because the option that is sold has a greater value than the option that is purchased.

The strategy is called a credit spread because the option that is sold has a greater value than the option that is purchased. Buy one closer to the money call or put and sell more trading strategies involving options and futures trading one deeper out of the money call or put. There are four primary strategies we implement involving the writing selling of options. A credit spread is a strategy that involves simultaneously selling an option and buying an option in the same month farther away from the market.