Trading Strategies

Index Arbitrage

The simultaneous purchase (sale) of stock index futures and the sale (purchase) of some or all of the component stocks that make up the particular stock index to profit from sufficiently large intermarket spreads between the futures contract and the index itself.

Reverse Crush Spread

The sale of soybean futures and the simultaneous purchase of soybean oil and meal futures. See also: Crush spread.

Automated Trading Systems and the Forex Market

An army of small speculators have entered the forex arena armed with pooled knowledge and sophisticated technology rivaling that of large institutions. By Dan Blystone As the editor of a website focused on trading and investing I try to keep track of industry related trends and the hot topics of

Horizontal Spread

An option spread involving the simultaneous purchase and sale of options of the same class and strike prices but different expiration dates. See also: Diagonal Spread, Vertical Spread.

AB=CD Pattern Keeping it Simple

By Larry Pesavento and Leslie Jouflas History of the AB=CD Pattern In 1935 a book was published for sale to investors at an incredible price of $1500. That book was Profits in the Stock Market by H.M. Gartley. On page 249 Gartley describes a chart pattern, “Practical Use of Trend Lines”, which w

Hedging

Taking a position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change or a purchase or sale of futures as a temporary substitute for a cash transaction that will occur later. One can hedge either a long cash

Debit Spread

A spread in which more cash is paid out than received. Opposite of Credit Spread.

Death Cross

The death cross is a sell signal that occurs when the 50 day moving average crosses below the 200 day moving average. See also: Golden Cross, Moving Average Crossovers

A Trading Technique using the Inside Bar with the MACD

By Sunil Mangwani ©2007, Reprinted with permission of The Trader’s Journal magazine (www.tradersjournal.com) Technical analysis to predict price action in the financial markets is just another factor used to put the odds in favor of the trader. But relying on any single indicator to provide sign

Ratio Spread

This strategy, which applies to both puts and calls, involves buying or selling options at one strike price in greater number than those bought or sold at another strike price. Ratio spreads are typically designed to be delta neutral. Back Spreads and Fro