I received an email from a service provider who has a successful LEAPS calendar/diagonal spread. but now he is offering similar type of service, i.e. Covered call on forex. Here is the description of the methodology:
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"With Forex, typically you can get at least 100:1 margin which means $1,000 of your money can control $100,000 worth of currency. Yes, that is very high leverage and that is a two-edge sword with plenty of risk. But, I'm going to explain to you that what I am teaching my subscribers and advocating which is "currency covered calls writing" as in your principle is protected as much as possible as in 99%. The point to understand is you can make or lose more money in Forex faster. And, of course my goal is to show you how to make more of it and make it faster with less risk.
Writing or LEAPs calendar spreads outcomes, you may need to wait an entire month or more until you know what the final outcome is and what your true profit will be if any. You see, you can have your equity stock price drop and the call income you collected may not be enough to cover the loss equity
value in the stock. In other words, there are risk involved and you will not know what the true risk until the written call option expires. In Forex, you will know exactly what your profit is when you start and it will 9 out of 10 be positive regardless which way the currency price moves. See the next paragraph for more details...
4. In Forex Currency Covered Calls, your written call strike price and premium you do collect will provide about a 99% protection of your long currency pair value. In other words, the written Forex covered call premium will cover your entire risk of currency price decay. As an illustration, the currency options use number of pips to the strike price and some time value to derive the posted
price of the currency call or put option. So, say you wanted to write a 1000 pips, one month of time out it would be priced at 1,175 pips which to simply one pip equals $10.00 each. The breakdown would be 1,000 pips for the call option spread to the call strike price and the extrinsic value for the time of 175 pips. When you write the call option you can select the strike price in pips for whatever you want and you collect the option premium without paying the spread commission.
The currency Forex call buyer pays the pips spread and you would only pay the spread if you "buy to close" that call option which will be rare. You normally let the currency calls expire worthless the majority of the time or actually be called out of the position at the predetermined strike price and you keep all of the daily SWAP interest and your original investment capital the way I have it set up. It is the SWAP interest that makes you a no questions asked return, day in and day out, every month after month!
Yes, you are reading this correctly and you would be foolish to not become a subscriber of mine. I can help you!
Again, I need point out this MAJOR difference in trading Forex.
You see, unlike equity stocks and LEAPs, Forex currencies pay interest everyday called SWAP and that interest is based on the $100,000 per lot per day. That SWAP interest alone will generate a 18% percent return per month without ANY compounding with the currency pair we use. That is what is known as "Carry Trade" people. Banks and astute investors do this all of the time and you could as well. One lot which would require $1,000 of margin could generate $711 SWAP interest per month which is an easy 14.22% return with only one trade per month with your ENTIRE principal covered by the written call premium.
You see, we are after the SWAP interest and the time value in the call option price.
Once you get the feel for the process, you can slowly increase the leverage percent and the number of lots which dramatically increases the daily SWAP amount of income which is the main objective and fully in your control. The other market factors like amount of price movement of the currency pair is the unknown exactly. But, the pips you collect from the call write covers your tail. Therefore, 1000 pips in our example would be your wiggle room and peace of mind before you would need to act.
The way I have it working I will provide an Excel template with the exact limit and stop orders which will handle those defensive actions for you. So there is some limited minor risk, but it is *much* safer than expert advisers (EA) on auto-trading!
Once you set your parameters in the Excel template during the planning stage, place your two separate orders, you turn off the computer and you could wait and do nothing until the option expiration day or either the limit or stop order is triggered.
Bingo! It is that simple and every outcome within reason are calculated to avoid a disaster and margin call.
=============================================
I am new to forex or options on forex. My question is:
1. "principle is protected as much as possible as in 99%" - Is this too good to be true?
2. How do I get more information about the SWAP interest, and is it possible to get 18%?
3. What is the best place to learn options on forex, and is it possible to cover most of the capital via premium as described above?
4. Any other suggestion?
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"With Forex, typically you can get at least 100:1 margin which means $1,000 of your money can control $100,000 worth of currency. Yes, that is very high leverage and that is a two-edge sword with plenty of risk. But, I'm going to explain to you that what I am teaching my subscribers and advocating which is "currency covered calls writing" as in your principle is protected as much as possible as in 99%. The point to understand is you can make or lose more money in Forex faster. And, of course my goal is to show you how to make more of it and make it faster with less risk.
Writing or LEAPs calendar spreads outcomes, you may need to wait an entire month or more until you know what the final outcome is and what your true profit will be if any. You see, you can have your equity stock price drop and the call income you collected may not be enough to cover the loss equity
value in the stock. In other words, there are risk involved and you will not know what the true risk until the written call option expires. In Forex, you will know exactly what your profit is when you start and it will 9 out of 10 be positive regardless which way the currency price moves. See the next paragraph for more details...
4. In Forex Currency Covered Calls, your written call strike price and premium you do collect will provide about a 99% protection of your long currency pair value. In other words, the written Forex covered call premium will cover your entire risk of currency price decay. As an illustration, the currency options use number of pips to the strike price and some time value to derive the posted
price of the currency call or put option. So, say you wanted to write a 1000 pips, one month of time out it would be priced at 1,175 pips which to simply one pip equals $10.00 each. The breakdown would be 1,000 pips for the call option spread to the call strike price and the extrinsic value for the time of 175 pips. When you write the call option you can select the strike price in pips for whatever you want and you collect the option premium without paying the spread commission.
The currency Forex call buyer pays the pips spread and you would only pay the spread if you "buy to close" that call option which will be rare. You normally let the currency calls expire worthless the majority of the time or actually be called out of the position at the predetermined strike price and you keep all of the daily SWAP interest and your original investment capital the way I have it set up. It is the SWAP interest that makes you a no questions asked return, day in and day out, every month after month!
Yes, you are reading this correctly and you would be foolish to not become a subscriber of mine. I can help you!
Again, I need point out this MAJOR difference in trading Forex.
You see, unlike equity stocks and LEAPs, Forex currencies pay interest everyday called SWAP and that interest is based on the $100,000 per lot per day. That SWAP interest alone will generate a 18% percent return per month without ANY compounding with the currency pair we use. That is what is known as "Carry Trade" people. Banks and astute investors do this all of the time and you could as well. One lot which would require $1,000 of margin could generate $711 SWAP interest per month which is an easy 14.22% return with only one trade per month with your ENTIRE principal covered by the written call premium.
You see, we are after the SWAP interest and the time value in the call option price.
Once you get the feel for the process, you can slowly increase the leverage percent and the number of lots which dramatically increases the daily SWAP amount of income which is the main objective and fully in your control. The other market factors like amount of price movement of the currency pair is the unknown exactly. But, the pips you collect from the call write covers your tail. Therefore, 1000 pips in our example would be your wiggle room and peace of mind before you would need to act.
The way I have it working I will provide an Excel template with the exact limit and stop orders which will handle those defensive actions for you. So there is some limited minor risk, but it is *much* safer than expert advisers (EA) on auto-trading!
Once you set your parameters in the Excel template during the planning stage, place your two separate orders, you turn off the computer and you could wait and do nothing until the option expiration day or either the limit or stop order is triggered.
Bingo! It is that simple and every outcome within reason are calculated to avoid a disaster and margin call.
=============================================
I am new to forex or options on forex. My question is:
1. "principle is protected as much as possible as in 99%" - Is this too good to be true?
2. How do I get more information about the SWAP interest, and is it possible to get 18%?
3. What is the best place to learn options on forex, and is it possible to cover most of the capital via premium as described above?
4. Any other suggestion?
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