Auto Quick Income Review

Auto Quick Income Review Overlay options in the forex market is a great way to control the risk at the same time as the benefit from the advantages of the bullish trend in the market. Options concept is extremely broad for this in this article , I intend to discuss only one term and then I will follow that with an article the other exposed to a second overlay strategy . One of our trading systems used in overlay options and you can follow the actual performance of this strategy in real-time from months to last . Auto Quick Income Concepts which I will talk with them very common forms can also be carrying out with ease and without the need for periodic maintenance. Those two things are what I like finding them in the trading system and therefore would not be the person who commits all the mistakes of the first time and then I can enjoy my life side by side with my business in Forex . I'm going to cover preventive orders status in this report do I have to cover the summons in the report, which will be followed .

Orders situation preventive

Mode option is composed of three elements . The first is the contract. When you buy an option situation , this means you are buying the right to sell to someone the base currency in accordance with the predetermined price during a specified time period in advance. Auto Quick Income Review You can buy an option to sell the situation today is a large amount of dollars at a price of GBP 2.0000 $ at any time between now and the date of your choice in the future . If the currency pair fell to 1.9900 , it still have the ability to sell at 2.0000 and then make a profit . In fact , it does not matter how much currency's slide . As long as within the time frame you have chosen , it can sell the currency at 2.0000 at any time Chah . Price situation ( 2.0000 ) of your choice to your contract , known as the exercise price . The second element is the time . Options are available in the form of monthly periods . Which means he can buy a contract valid until the next month or the month following 12 from now . Choice depends on you . Finally , options costs money . The price of the option is called the premium . Premium be greater the higher the value of the option . The choice in the long long time and the exercise price is higher than the more expensive option that is his business, in the short term with the exercise price of the youngest . I think the best way to explain it is Auto Quick Income that we take an example of it.

Example 1:

Let's assume that on January 22, 2007 Art purchase contract on the GBP USD . Suppose that at this time the price was 1.9750 . Since you are a wise investor, you may want to get some Auto Quick Income protection from market risk for this Vstqom buying a protective put option allows you to sell at 1.9750 this contract at any time before the expiration of the contract. In this case , this contract may end after a month from now , specifically in the third Friday of February, or XVI of it. Mode option that will cost you the equivalent of 150 points per contract . If the pair fell in later time to level 1.9502 . In this case , the situation is still an option worth 248 points, he was still able to sell at 1.9750 - . This amount equals exactly the amount lost in the purchase contract and therefore, the effect of both Samhawwa other. In reality , the only thing that is lost 150 points, which is the amount you paid for the option to buy the first time . You do not need to place orders to stop because you are fully protected . Even if the value of the contract fell sharply - more than 150 points planned , you still have the necessary precaution to protect your capital .

Example 2:

Trading in the next month , from February to March , there will be another loss , but trading from March to April will be a winner . For trading in March to April , you may be bought trading center SPV on the currency pair at 1.9372 . And thus will have the option of trading center covered the situation at 1.9350 which will cost you 120 points and thus puts you in a position of exposure between 1.9350 and 1.9372 . Nonetheless, if you add these two centers to some of you are going to have a level of total loss is similar to you during the trading period from January to February During the month, assume that your position SPV rose to 2.0027 . This means that you have achieved 656 points. Now what about the option of the situation? Well , undoubtedly will want to sell this option at 1.9350 and thus will leave mode option expires without interest . This will mean a reduction in earnings by the same amount you paid for the option of the situation , while earnings will total about 535 net new points.

This strategy may seem a bit complicated for first glance but well worth learning more about them because of the big advantages . All institutional traders with using overlay options, such as preventive mode options , at all times because it will help them to control risk and reduce the overall volatility in their wallets Finance. Here we will mention also some of the additional benefits to both sides of the use of this strategy .

Interest # 1 - There are no stop orders

You will not need to stop placing orders to buy the currency at the center . How many times have you are correct in predicting the direction of the market , but stopped as a result of sharp fluctuations ? I can say that this is happening to most of the traders on a regular basis . But with the preventive mode options remain constant in circulation even though the exchange rate fell to zero , if possible without exceeding the maximum loss . Also , this feature is available through the release of important news because you always remain in control of the situation .

Interest # 2 - the rise of unlimited

Unlike a lot of hedging strategies , this technique still allow the board is limited . In spite of the gains are offset by the profits Mode option also remains large .

Interest # 3 - less fluctuations of the financial portfolio

Overall portfolio in this case are at a lower level of volatility , because the declines can fit. Here we will mention additional example . Suppose that the pricing was reasonable and volatility continuously , on average, during the last ten years and was the center of your strategy is to buy the GBP Long USD put option with using the leverage of a total portfolio of 20 : 1 . This helped to achieve a return of 10% per year during this time period . When you combine this feature with some wise analysis will be possible to see returns much better than this .

Face # 1 - the cost of the option position

Mode option will cost you 150 points if his legacy is valid until the expiration date , whether the market moves up or down each month . This price will be deducted from the gains of the ups and creates a decline predetermined . Even if the market fell by less than 150 points , the maximum loss will remain as it is.

Face # 2 - the cost of trading

If you purchase a mode option , you will pay a commission. They continued with the decline in exchange rates over time, this despite being nominally , but he adds another point to trading losses with each monthly .

The most difficult thing for most investors is to maintain their capital . You'll hear from Successful investors always say that if you could protect your capital effectively , the profits will take care of itself . I totally agree with this statement and use the mode options protectionism in order to help myself in the hedge . In offer a model for a portfolio of financial transactions in the section which is used in the overlay options illustrate this concept in real time. Log and discovered a real command to know we are winners and permanently.

Jajerson by Gauguin , author of the book profit with Forex , publisher McGraw-Hill


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