Trading options in inversely related commodity markets

Discussion in 'Options' started by lasner, Jan 5, 2010.

  1. lasner


    Hi I was looking to trade options in inversely related commodity markets.

    For example the dollar and gold. Does anyone use this method? Could anyone make any good recommendations?

    I was looking to possibly write naked options

  2. drcha


    I don't really understand your strategy yet. Do you anticipate a direction for gold and the dollar (e.g. sell gold puts and dollar calls somehow), or do you want a neutral stance on each?

    If you are picking a direction, there could be some better strategies (bull or bear spreads) than selling naked options.

    If you are not picking a direction, then to sell naked options in a directionless manner I suppose you would be selling naked straddles. This is also not a good strategy if you expect movement. Even though one underlying may zig while the other zags, you are going to lose on both of them.

    Maybe we can help more if you tell us a little more about what you have in mind.
  3. lasner


    It's not really a strategy. I was just looking to add relatively low risk income to my commodity account. I know those two markets are inversely related and was just seeing if anyone had strategies to trade them....straddles or spreads.

    Maybe use one to hedge the other positon....just looking for ideas