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Have you ever wondered how professional option traders turn unpredictable events, like earnings into a win-win situation? Just imagine how you could be at ease, while the rest of the world are daunted at how the earnings would turn out. Trading options is tricky, but knowing how to play the game right is what will set you apart from the rest.
Fifty-50 unveils two of the most sought after strategies during earnings season: Convoluted and Random Walker. These were first introduced in our Practical Option Trading (POT) class which is being held every Wednesday night. Since then, we have never stopped receiving requests to turn this into a product everyone can refer to time and again.
CONVOLUTED SPREADSTM VS. RANDOM WALKER SPREADSTM
Though first impressions of the Random WalkerTM will lead you to believe that it is the same strategy as a Convoluted SpreadTM, there are slight differences in the two in terms of goals, objectives, construction, and timeframe.
A Convoluted SpreadTM is simply a combination of a group of vertical spreads (and possibly naked options) all lumped together. It is geared to two specific situations: Earnings and Extremely low volatility.
<img class="size-full wp-image-6919 aligncenter" src="data:;base64,” alt=”Convoluted” width=”376″ height=”388″ hspace=”20″ vspace=”20″ data-lazy-sizes=”(max-width: 376px) 100vw, 376px” data-lazy-srcset=”https://www.randomwalktrading.com/wp-content/uploads/2013/10/Convoluted-250×257.png 250w, https://www.randomwalktrading.com/wp-content/uploads/2013/10/Convoluted-290×300.png 290w, https://www.randomwalktrading.com/wp-content/uploads/2013/10/Convoluted.png 376w” data-lazy-src=”https://www.randomwalktrading.com/wp-content/uploads/2013/10/Convoluted.png?360a39″ />
RANDOM WALKER SPREAD
A Random WalkerSpread TM is a strategy where the totality of the positions results in a final position that is greater than the sum of its parts.
<img class="size-full wp-image-6920 aligncenter" src="data:;base64,” alt=”Random Walker” width=”388″ height=”384″ hspace=”40″ vspace=”40″ data-lazy-sizes=”(max-width: 388px) 100vw, 388px” data-lazy-srcset=”https://www.randomwalktrading.com/wp-content/uploads/2013/10/Random-Walker-250×247.png 250w, https://www.randomwalktrading.com/wp-content/uploads/2013/10/Random-Walker-303×300.png 303w, https://www.randomwalktrading.com/wp-content/uploads/2013/10/Random-Walker.png 388w” data-lazy-src=”https://www.randomwalktrading.com/wp-content/uploads/2013/10/Random-Walker.png?360a39″ />
|Convoluted Spreads||The purpose is to custom design a spread that meets your opinion of the future market move without costing you much should the market not meet your expectations||Convoluted Spread is usually placed at one time. It maybe broken down into several spreads and naked options but one usually tries to have all pieces executed simultaneously.||2-8 weeks|
|Random Walker Spreads||The primary objective of a Random Walker Spreads is to create a position that makes money throughout an entire range of likely stock closing prices||Instead of all the pieces of the spread as close to the same moment as possible, the Random Walker Spread will usually have positions (layers) added over many days|
Forex Trading – Foreign Exchange Course
Want to learn about Forex?
Foreign exchange, or forex, is the conversion of one country’s currency into another.
In a free economy, a country’s currency is valued according to the laws of supply and demand.
In other words, a currency’s value can be pegged to another country’s currency, such as the U.S. dollar, or even to a basket of currencies.
A country’s currency value may also be set by the country’s government.
However, most countries float their currencies freely against those of other countries, which keeps them in constant fluctuation.
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