About Us

The Options on Futures Advisory

Read on to find out how to receive your no-risk, no-obligation, 4-week $1 trial!

The Options on Futures Advisory

Hello everyone. My name is Patrice V. Johnson. And I welcome you all to my newsletter. My advisory comes out each week, every Sunday, before the next trading day.

WHY PURCHASE AN OPTION INSTEAD OF A FUTURES CONTRACT?

The basic advantage of purchasing an option on a futures contract as opposed to the futures itself is limited risk. When a trader takes a position in the futures market, initial margin money is required. The margin is relatively small and is usually only about 5% of the value of the futures contract. If the market moves against the trader’s position, however, more margin money is required to hold onto the position. In a fast moving market, the trader can lose more than the initial margin deposit. In options trading, however, the trader is required to pay a premium to purchase the option. The size of the premium is determined on the floor of the exchange. That premium is the maximum amount the trader can lose if the market does not move as expected. If the market does trend as expected, the option holder still has unlimited profit potential (minus the premium cost.)

For the reasons mentioned above, I plan on trading options on futures for my newsletter when I want to participate in the price movement of the futures markets.

WHO WOULD THIS NEWSLETTER SERVICE BE GOOD FOR?

This newsletter would be good for anyone who has an interest in trading options on futures markets but whom do not have a technical, and/or fundamental method or any particular strategy for that matter for trading options on futures.

PRICE FORECASTING, TRADING TACTICS, AND MONEY MANAGEMENT

First, to increase your odds of survival in these markets, you need to be able do the following three things successfully:

1. Forecast Price (Determining which ways the market is expected to trend),
2. Tactical Trading (Determining specific entry and exit points) and
3. Manage Money (Determine how much funds I should I commit to the trade, portfolio makeup, diversification, the use of stops, reward to risk ratios, whether to trade conservatively or aggressively, and what to do after periods of success or adversity).

Second, trading should be approached as if you are running a business. And business is the effective management of cash flow. Because you happen to be managing a trading company.

Third, the trend is your friend. And it is important to trade in the direction of the trend.

WHAT TO EXPECT FROM MY NEWSLETTER SERVICE

• THE GENERAL TREND OF THE MARKET

  Each week, every Sunday, before the next trading day, I will begin by posting what I have determined to be the general trend of the market. I will state that the general trend (or long term or intermediate term trend) of the market is either UP, DOWN, or SIDEWAYS. For example:

  General trend of the market: DOWN     UP     SIDEWAYS

• FUTURE (INDEX, ENERGY, INTEREST RATE, CURRENCY, METAL, LIVESTOCK, GRAIN, or FOOD & FIBER) UNDER ANALYSIS

  I will then let you know which future I will be analyzing for trading for the newsletter service and provide you with the last closing price for that stock or future. For Example:

  Stock Under Analysis:	NDAQ	Last Closing Price: $
  Future Under Analysis:	Mini Dow Index	Last Closing Price: $

• TECHNICAL ANALYSIS

  I will utilize the method of Technical Analysis for the future under analysis.

  The purpose of providing you with my technical analysis of the future under analysis is to inform you of what is actually happening in the stock or future.

  Technical analysis is the study of market action (price, volume, open interest), primarily through the use of charts for the purpose of forecasting future prices trends.

  For the purpose of my newsletter, I will include daily, weekly, and monthly charts of the futures under analysis as a way of presenting my Technical Analysis (the bullish or bearish psychology) of the futures under my analysis as well as for the purpose trading the options on futures under analysis.

• FUNDAMENTAL ANALYSIS

  To make you aware of what ought to happen with the future under analysis, I will provide you with fundamental analysis for thefuture under analysis.

  Fundamental analysis is the study of the cause of market movement.

  Fundamental analysis examines all of the relevant factors affecting the price of a futures contract in order to determine the intrinsic value of that future. The intrinsic value is what the fundamentals indicate that the future is worth based on the law of supply and demand. If this intrinsic value is under the current market price, then the future is overpriced and should be sold. If market prices is below the intrinsic value, then the market is undervalued and should be bought.

  If fundamental analysis data is not available for the future under analysis. I will state “N/A” for this field.

WHICH IS MORE IMPORTANT - TECHNICAL ANALYSIS OR FUNDAMENTAL ANALYSIS?

Both Technical Analysis and Fundamental Analysis approaches to market forecasting attempt to solve the same problem, that is, to determine the direction that prices are likely to move. They just approach them from different directions. The fundamental factors suggest what ought to happen in the market, while the technical factors suggest what is actually happening in the market. It is therefore, the more important of the two angles for the trader.

• FREQUENCY OF MY ALERTS

  I will get you my newsletter each week, every Sunday, before the next trading day. An alert will be sent thereafter if I have an update for you (For example: If I think you should pyramid (add positions), take profits, or cut losses short)

• WHAT I PLAN ON TRADING FOR MY NEWSLETTER SERVICE

  For my newsletter service, I plan on trading options on Futures. I will be trading Options on Futures primarily on the 30 Day Fed Funds (FF), and the Mini Dow Index (YM), because of their low initial margin requirements for their futures, their options are American Style, and primarily because the options on futures for these markets are cash settled. I may also trade Options on Futures on the U.S. Dollar Index (DX) for this newsletter. Keep in mind though that that U.S. Dollar physically settles as opposed to cash settles. And I plan to exit the options on the U.S. Dollar Index Futures before it physically settles.

• HOW MUCH MONEY DO I NEED TO HAVE TO FOLLOW MY TRADES

  Since trading involves the risk of loss, I highly recommend the use of “Discretionary Income” and “At Risk Income” to follow my trades.

  Discretionary Income is spendable income remaining after the purchase of physical necessities, such as food, clothing, and shelter, as well as the payment of taxes.

  At Risk Income is the amount that you are willing to lose out of your Discretionary Income.

  If you plan on following my trades on NDAQ, you would need at least $5000.00 of “Discretionary Income” and “At Risk Income”.

  If you plan on following my options on futures trades on the Mini Dow Index, U.S. Dollar Index or 30 Day Fed Funds, you would need at least $5,000.00 of “Discretionary Income” and “At Risk Income.”

  If you plan on following my trades for both NDAQ, and Options on Futures on the U.S. Dollar Index or 30 Day Fed Funds or the Mini Dow Index, you would need at least a total of $10,000.00 of “Discretionary Income” and “At Risk Income” - $5000.00 to trade the stock market and $5000.00 to trade the options on futures market.

• WHAT BROKERS CAN YOU USE?

  I use optionsXpress for executing my online options on futures orders, but you may use another broker if you wish.

• DO YOU NEED A SPECIAL TRADING ACCOUNT

  In a nutshell, you will need the following trading account:

  1. A futures account that will allow you to trade options on futures. I use OptionsXpress for this.

DISCLAIMER

The information contained in this report and future reports and newsletters contain independent analyses, statements, opinions, beliefs, and strategies that are mine and not those of the company and is made available to anyone interested in my analyses, statements, opinions, beliefs, and strategies made on a stock or future. I do not represent that the information, analyses, statements, opinions, beliefs, and strategies contained in this report or future reports and newsletters are accurate or complete. And since trading stocks and options on futures involve risk of loss, I highly recommended that you seek the expertise of a professional investment advisor, professional tax consultant and/or broker before acting on any analyses, statements, opinions, beliefs, and strategies contained in this report or in future reports and newsletters of mine for any stock or future. The analyses, statements, information, opinions, beliefs, and strategies contained in this report is not a recommendation to buy, sell, or hold any stock or future. Nor are the statements, analysis, information, opinions, beliefs, and strategies contained in this report or in future reports and newsletters an offer for any stock or futures or solicit the offer of any stock or futures of any company. I will trade securities of the companies on which I report during the term of engagement. I assume no responsibility for your trading and investment results. You assume all responsibility for your trading and investment results.

This is The Options on Futures Advisory.

Good night!

Very truly yours,

Patrice V. Johnson

Learn more about and SUBSCRIBE to Options on Futures Advisory

4-Week $1 Trial!

Not sure if The Options on Futures Advisory is for you? Then try it for 4 weeks - for just $1!

How can I contact The Options on Futures Advisory?

The Options on Futures Advisory, by Patrice Johnson, is brought to you by Stock Barometer. For customer service or subscription questions, it’s best that you e-mail us directly at CustomerSupport@StockBarometer.com.

You can also reach us by phone or fax at 1-309-216-5878.

Please note that your phone message will be answered by our service and delivered via e-mail. This allows us to respond via e-mail 24/7. For faster response, if possible, please e-mail us at one of the e-mail addresses below.

For questions regarding the editorial content of The Options on Futures Advisory, please e-mail Patrice Johnson directly at Patrice@StockBarometer.com.

We respond to all questions and comments. Please remember, however, that we cannot give you individual trading or financial advice.

Our commitment is to you, our subscriber. And we never forget it.

Regards,

Patrice Johnson