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BZB Trader

Here’s a link to a great idea from the latest issue of Futures magazine (www.futuresmag.com).  Regular readers know I cull some nice nuggets out of these pages (subscriptions are FREE) and this month features an article by Susan Steward explaining the SPX/OEX 1-5 option setup.  Playing the SPX/OEX spreads is typically a low risk endeavor but this setup has a number of attractive features not viable in other simple spreads.  A thinking trader could easily imagine a similar strategy  using SPY/DIA , SPY/IWM or DIA/IWM option spreads.

And now for a quick reality check:

Bernanke casually mentioned today in his twice a year report to Congress that the central bank was prepared to provide additional stimulus if the economic lull persists. Those remarks caused an apparent bullish ripple in the markets and a whopper jump in GLD and GDX.  Above is the Fed’s buying schedule over the next month…a total of $14 billion and clearly much subdued from last month’s $70 billion purchase. Ben may have to raise the mark soon as the financials do not look bullish and may get really bearish once earnings are revealed….a sector to avoid IMHO.


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