Due to a combination of the rate of the futures ten-year German bond, the futures 10-year American bond and the Euro/Dollar parity, the spread we are concerned with is at a record high, as well as having formed a double top pattern.
 This spread with bonds from either side of the ocean, is a three band spread. As bonds are quoted in different currencies, any possible movement against the parity of the two currencies involved must be covered.
 Since we are at historic highs, we should sell this spread with the sound …

Taking advantage of the fact that all ETFs perform very poorly in comparison with their underlying, we are going to sell one ETF that replicates the reverse SP500. The SPXU.
If the SP500 goes down, the SPXU would go up and this would work against our strategy. In order to avoid this problem, we will cover this operation by selling one mini SP500 future.
The bargain would look as follows:
1 mini SP500 future sold
500 shares of SPXU sold
Then, we just reap the benefits and do whatever we want
The following graphic shows the …

Many are convinced that the relation between Put and Call can give some clues over the possible market tops and bottoms. This seems logical on principle, but the method used to handle that information is not the right one.
When looking at each one of the two types of options, we cannot tell how many such contracts are net purchases by small traders satisfied by the market makers and how many of the options sold were bought previously.
This is the same as the contract options traded to cover long or short …

There is a Calendar Spread for General Motors with call options where it is possible to loose a small amount of money or earn a lot. Logically, in order to win it is desirable that General Motors waits to go bankrupt at least a couple of months.
It is quite reasonable that this will not happen in two months, since it has been proposed a swap of debt for shares at a rate of 225 shares of General Motors which yesterday closed at 1.15 dollars for every $ 1000 nominal par …

The three charts below show that the BUND (10 Year German Bond) has confirmed a double top pattern breaking the last low, the BOBL (5 Year German Bond) is close to confirm a head and shoulders pattern by breaking its neckline and finally the SCHATZ (2 Year German Bond) is still near the top and far from the breaking area.
This is a logical situation, because the remaining life of each bond acts as a kind of leverage that pushes it to produce stronger percentage movements. The first one breaking must …

Below is shown the first and very simple example of a spread chart, to little by little catch the interest. This example is important to understand the mechanism of a spread and to “digest” this theory. It is not posted with the intention to operate with it tomorrow.
This case tries to clarify the concept of applying a certain factor to each underlying to make the spread.
This first example it shows a spread between one contract of the DAX and four contracts of the EUROSTOXX50. This is an attempt that the …