Paul Forchione - "Online Instruction for Trading Futures using OptionVue 5"

Paul Forchione is a Commodity Trading Advisor and Commodity Broker for Opportunities In Options, Inc.. He has been an active user of OptionVue 5 since 1994, and specializes in helping people learn how to use non-directional, volatility-based strategies in trading futures and options on futures.

He is also the author of Trading Options Visually, a highly acclaimed book that presents a graphical and mathematical approach for trading options. He is also a frequent speaker at seminars throughout the country.

In 1980 Paul became a market maker on the Chicago Board Options Exchange (CBOE) in Chicago, IL. He was General Partner for C.O. Jones & Co. and traded options on equities. Two years later, he became a Floor Trader on the Chicago Board of Trade (CBOT) and traded options on US Treasury Bond futures for his proprietary account.

Forchione Training Session 1:
Trading Delta-Neutral with OptionVue 5

Traders perpetually wrestle with the following question: "What factors are going to impact future price behavior?"

I don't spend much time trying to answer this question because the answer changes all the time. For example, there are times when a technical chart pattern can be the precursor of a market move. And there are times when the same pattern results in a move in the opposite direction. Technical patterns, in other words, work only some of the time. They can signal the tendency of a market to move higher or lower but they are not very reliable. In addition, government reports and breaking news stories often trigger market rallies or sell-offs. Determining the degree of their market impact is an inexact science.

Don't put all your money at risk by guessing which way a market will move.

It's okay to have an opinion about what will happen and to speculate with a portion of your risk capital, but it's generally better to let your opinion about market direction take a back seat to objectively analyzing what's currently happening.

In other words, establish positions based on two things:

• How much a market is moving regardless of direction; and
• How expensive or cheap its options are.

That is the briefest definition for delta-neutral trading that you'll ever read.

Delta-neutral traders can use Statistical Volatility (SV) and Implied Volatility (IV) to decide what kind of position is desirable. SV tells us how volatile the underlying futures contract is. IV tells us options traders' expectations for future volatility of the underlying futures. It's important to compare current SV to current IV and to compare current SV and IV to their historical levels.

In Trading Delta-Neutral with OptionVue, I show you how I use OptionVue 5's Survey to identify markets that are candidates for:

• Selling Premium Strategies: short strangles, short straddles, and ratio spreads; and
• Buying Premium Strategies: long strangles, long straddles, and ratio backspreads

After identifying candidates for the different strategies using Survey, I show you how I experiment with specific trades using OptionVue 5's Graphic Analysis to choose the trade(s) that possesses the most desirable reward-to-risk characteristics.

So if you're a current OptionVue 5 system owner or are contemplating a purchase of OptionVue 5, this pre-recorded 40-minute session to help understand how I use and how you can better utilize this great software to find possible candidates.