The Simplified Futures and Options Trading Strategy
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The Simplified Futures and Options Trading Strategy
The author proposes a simple Contrary Positions Rule strategy for playing Futures and Options combinations, naming it the CPR F&O strategy. The reader is guided to create an optimum strategy that exploits the existing trend, implied volatility of options and the time decay inherent in options to one€s advantage. Right at the start of executing initial trades, the reader can estimate maximum profit potential, reversal and exit points using just plain arithmetic and follows those figures through for one calendar month.
The strategy is deeply ingrained into the reader€s psyche as a trading skill by walking the reader through the past 12 months of actually trading the S&P CNX NIFTY as a real world example. Finally results are also compared to the visual trend following plan of the modified Heikin Ashi Fibonacci trading system. This book is a natural sequel to the earlier book by the author. Since writing options is an integral part of the strategy, the reader is also guided to create an Excel worksheet for estimating option prices, implied volatility and delta, based on the Black-Scholes equation, which comes in handy to initiate trades and in evaluating exiting positions.