Complimentary Options Trading Brochures

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The volatility in the commodity and financial markets has made trading futures riskier than ever. Not so long ago, a person could trade a contract of SOYBEANS and not be faced with the prospect of a 50-70 cent range on a daily basis. Similarly, the MINI S&P, CURRENCIES, and ENERGIES all have become much riskier to trade for the average investor.

With this in mind, we have shifted our focus to the MINI FUTURE contracts. With current markets conditions, it is difficult and perhaps unwise to trade a full size contract with less than $15,000, $20,000 in your trading account. Utilizing the MINI FUTURE contracts can help to minimize exposure greatly, while allowing you to still participate in the futures markets. While some markets, such as the CURRENCIES and CRUDE OIL have mini contracts that are one half the size of the full contract, others such as the GRAINS, SILVER and STOCK INDICES are one fifth the size. While there is still a substantial risk of loss with any of these MINI FUTURE contracts, perhaps one can sleep better with the decreased exposure.

1. The GOLD market has seen a nice resurgence over the last week as the white metal has been seen a safe haven with all the market uncertainty over the world. GOLD is once again being seen as a flight to quality play as the talk of massive financial backing being need for the U.S. "Bad Bank" plan heats up. Also, with a better than expected GDP number this morning, and the consumer confidence report showing that inflation expectations rose over the last month, GOLD could be in a position to continue its move higher.

TRADE: Consider going long April MINI-GOLD right in this area ($920) with a risk of the trade below $900. 1st target on the trade is 937 with expectations for the market to run to $1,000 at some point early in the year. GOLD is well known for sharp pull backs so make sure a stop is in.
 
2. SOYBEANS sold off yesterday with the expectations that rain levels in Argentina were heavier than initially expected. A higher U.S. DOLLAR over the last week has helped to pressure the SOYBEANS as well. We are looking for a continuation to the downside in SOYBEANS as we will look to sell March Mini SOYBEANS at this current level of $9.82, with a risk of the trade on a close above $10.01. 1st target on the trade is 923^0 with the main target below 907^0.

3. U.S. Treasury BONDS have been trending over the last few weeks as fear of supply and a demand for a higher yield in treasuries have kept the bond futures pointing down. Unless there is some kind of fresh outright buying by the Federal Reserve, one has to assume the path of the least resistance will be lower. Because the BOND market does not have MINI contracts any more, take a look at buying some nearer term puts to stay in the trade and not have to worry about the whipsaw, especially with the unemployment numbers coming out next Friday.

TRADE: Consider buying March U.S. BOND 120,121, or 122 puts (up to $1,000) and risking $600-$700 on the trade. Consider exiting the trade on a sharp spike down of 2-3 basis points in the BOND market.

Futures and Options Trading is speculative and involves substantial risk of loss.

Bill Borkowski is a retail broker at Dorman Trading, LLC. A 12 year veteran of the futures markets, Bill has traveled around the country doing the seminar circuits. Bill works with clients of all kinds, offering support to online as well as full service traders.

ATTENTION Strategy Runner Users:

Are you tired of an unreliable platform disrupting your trading? We think we have a solution. Dorman Trading now offers Strategy Runner with our Dorman Direct platform. Dropped orders and slow execution speed are now a thing of the past. Try our 2-week demo. See for yourself!