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Casual Articles - The Secret of Reduced Margin Spreads
If you have a website for your home-based business, you need traffic. Web traffic is of utmost importance for any business. No matter what business model you're following, no matter what your goal is, be it selling a product or service you have, you need a steady stream of targeted traffic.The truth is, there are numerous ways to generate traffic. The key is to find the most effective yet most affordable strategies based on your budget.Although it may be easy for big companies with deep pockets to throw cash into a pay per click campaign such as Google Adwords, most home based businesses can?t afford huge pay-per-click campaigns. Yet without targeted traffic no business can survive for long.One of the great advantages to running an Internet business is that the home-based business owner has many low or no cost choices when it comes to advertising.Following are five tips that can help increase your rankings in the search engines and gain much needed exposure.Tip #1: Traffic ExchangesThese are exceptional tools. However, they must be used correctly to get results. Although every niche may not benefit from this particular traffic method, it can be used with great success when dealing with network marketing, affiliate marketing, and other home based business opportunities.
Leverage: This leads us to the next benefit of spread trading—with the same amount of margin, you could have traded 4 soybean spreads instead of one soybean futures. How’s that for leverage? Instead of making $250 on a five point move, you could have made $1,000. Reduced margin spreads offer a much more efficient use of your margin money.
Trend: Earlier I said that spreads tend to trend much more dramatically than outright futures contracts. Not only that, but they trend more often than do outright futures. I don’t have room here to show you the dozens of sharply trending spreads that ca
As an Internet entrepreneur your ultimate goal is most certainly the success of your Internet business but statistics show that real money are made by a small percentage of the online businesses. An Internet business takes a great deal of time and effort, it's not easy to build and maintain it and you need total commitment to succeed. Lack of complete passion for your business and of the desire to succeed will most likely result in failure.As the center of your online business, the Internet entrepreneur, you should teach yourself as many of the following characteristics as you can. These are the most important characteristics shared by successful entrepreneurs:1) Goal settingMake sure you write down your goals, it's best if it's done on a piece of paper that will be viewable when at your desk. Set short term goals, that are reachable in a short period and long term higher goals for the long run but don't set them too high as you might get discouraged if you won't achieve them. Work each day, week and month towards your short term goals and set them higher each time and in the end you'll achieve your ultimate goal.2) Self discipline and motivationYou have to write down your own schedule an stick to it, start working early. Wake up early just as if you were working outside your hom
WHAT IS A REDUCED MARGIN SPREAD?
Because of perceived lower volatility, exchanges grant reduced margins on certain types of spreads. Spreads consist of being long in one or more contracts of one market and short in one or more contracts of the same market but in different months—an Intramarket spread; or being long in one or more contracts of one market and short one or more contracts of a different market, and in the same or different months—an Intermarket spread.
DISTORTIONS ABOUT SPREADS
There are some distortions about spread trading that need to be dispelled. If we get them out of the way, I can show you the tremendous advantages spread trading has over any other form of trading.
It is said that spreads do not move as much as outright futures. I agree 100% with that statement. However, spreads trend much more often than outright futures, they trend much more dramatically than outright futures, and they trend for longer periods of time than do the outright futures. For these reasons you can make much more money with spreads than with the outrights.
The second distortion about spread trading goes like this: “You have to pay double commissions when you trade spreads.” Yes! You have to pay two commissions for every spread you enter in the market. So what? You are trading two contracts instead of one. You pay two commissions because you are trading two separate contracts, one in one place and the other in an entirely different place. Paying two commissions for two separate trades is hardly unfair. Let me tell you what is unfair—paying a round turn commission for an option that expires worthless. Why don’t you hear people complaining about that? You pay for a round turn, and you receive only half a turn. Doesn’t make a lot of sense, does it?
ADVANTAGES OF SPREAD TRADING
There are so many advantages to trading reduced margin spreads that I hope I don’t run out of room here before I can tell you all of them. Let’s begin with return on margin, i.e., yield.
Yield: As I write this, the margin to trade an outright futures position in soybeans is $1,050, whereas a spread trade in soybeans requires only $250, only 23% as much. If soybean futures move one full point, that move is worth $50. If a soybean spread moves one full point, that move is worth $50. That means either a 5 point favorable move in soybean futures or a 5 point favorable move in a soybean spread earns the trader $250. However, the difference in return on margin is extraordinary: In the futures the return is $250/$1,050=23.8%. For the spread, the return is $250/$250=100%. Think about that!
Leverage: This leads us to the next benefit of spread trading—with the same amount of margin, you could have traded 4 soybean spreads instead of one soybean futures. How’s that for leverage? Instead of making $250 on a five point move, you could have made $1,000. Reduced margin spreads offer a much more efficient use of your margin money.
Trend: Earlier I said that spreads tend to trend much more dramatically than outright futures contracts. Not only that, but they trend more often than do outright futures. I don’t have room here to show you the dozens of sharply trending spreads that can
During the early part of this century, many hi-tech workers lost their jobs as the economy went into a tail spin and the technology companies found they had no markets for all of their technology heavy projects. Thousands of people lost their jobs and had to look for employment or begin new businesses. The silver lining in this phenomenon was that these same people changed careers and also started many new businesses from home.Whether it is doing contract work, designing web sites, building a trades business or even babysitting the neighbors kids many people found that there was a life after being laid off and in many cases a better life at that. They found that suddenly they were in control of their own schedules instead of having to answer to the boss. They still needed to make money while they worked from home, however they could choose the hours they worked and spend more time with their families.One of the most important things that everyone should keep in mind about making money from a home business is that everyone must continue to develop and improve their skills. It does not matter whether you are baby sitting the neighbors kids or operating a hi-tech web site development business out of your house. Staying abreast of the latest technology and the latest trends in your chosen business is abs
DISTORTIONS ABOUT SPREADS
There are some distortions about spread trading that need to be dispelled. If we get them out of the way, I can show you the tremendous advantages spread trading has over any other form of trading.
It is said that spreads do not move as much as outright futures. I agree 100% with that statement. However, spreads trend much more often than outright futures, they trend much more dramatically than outright futures, and they trend for longer periods of time than do the outright futures. For these reasons you can make much more money with spreads than with the outrights.
The second distortion about spread trading goes like this: “You have to pay double commissions when you trade spreads.” Yes! You have to pay two commissions for every spread you enter in the market. So what? You are trading two contracts instead of one. You pay two commissions because you are trading two separate contracts, one in one place and the other in an entirely different place. Paying two commissions for two separate trades is hardly unfair. Let me tell you what is unfair—paying a round turn commission for an option that expires worthless. Why don’t you hear people complaining about that? You pay for a round turn, and you receive only half a turn. Doesn’t make a lot of sense, does it?
ADVANTAGES OF SPREAD TRADING
There are so many advantages to trading reduced margin spreads that I hope I don’t run out of room here before I can tell you all of them. Let’s begin with return on margin, i.e., yield.
Yield: As I write this, the margin to trade an outright futures position in soybeans is $1,050, whereas a spread trade in soybeans requires only $250, only 23% as much. If soybean futures move one full point, that move is worth $50. If a soybean spread moves one full point, that move is worth $50. That means either a 5 point favorable move in soybean futures or a 5 point favorable move in a soybean spread earns the trader $250. However, the difference in return on margin is extraordinary: In the futures the return is $250/$1,050=23.8%. For the spread, the return is $250/$250=100%. Think about that!
Leverage: This leads us to the next benefit of spread trading—with the same amount of margin, you could have traded 4 soybean spreads instead of one soybean futures. How’s that for leverage? Instead of making $250 on a five point move, you could have made $1,000. Reduced margin spreads offer a much more efficient use of your margin money.
Trend: Earlier I said that spreads tend to trend much more dramatically than outright futures contracts. Not only that, but they trend more often than do outright futures. I don’t have room here to show you the dozens of sharply trending spreads that ca
In this society, business corporations sponsor everything from car and bike races; soccer; football; basketball; golf; tennis; dusting; bed-making; shoveling smoke; watching paint dry...you name it! There are corporate spokes-people for everything under the sun such as weight-loss products; soft drinks; beer; fast food; slow food; real slow food for Seniors; auto parts...you name it. Whenever there's a buck to be made, there's a corporate sponsor near-by! Put a corporate logo on a pile of manure, and see what happens! You'll sell it before you can get a shovel.I was dis-connected from the Internet and my website for 2 1/2 years, because of illness and hardship, so I'm still a novice in the writing and website-building business. But, the Lord has blessed me, and I'm back to start off where I left off.Putting a corporate logo on a website, could mean a year's salary or more for many of us. With SIX job layoffs over the past decade, I have wanted my own home business more than anything. But, the failure of the dot.com's of a few years ago, showed us that there is no "pie in the sky," and everything is going to take time, something that few of us have. Financial transactions on the Internet have not been safe until recent years, so that was a problem for business. Because all this learning was g
The second distortion about spread trading goes like this: “You have to pay double commissions when you trade spreads.” Yes! You have to pay two commissions for every spread you enter in the market. So what? You are trading two contracts instead of one. You pay two commissions because you are trading two separate contracts, one in one place and the other in an entirely different place. Paying two commissions for two separate trades is hardly unfair. Let me tell you what is unfair—paying a round turn commission for an option that expires worthless. Why don’t you hear people complaining about that? You pay for a round turn, and you receive only half a turn. Doesn’t make a lot of sense, does it?
ADVANTAGES OF SPREAD TRADING
There are so many advantages to trading reduced margin spreads that I hope I don’t run out of room here before I can tell you all of them. Let’s begin with return on margin, i.e., yield.
Yield: As I write this, the margin to trade an outright futures position in soybeans is $1,050, whereas a spread trade in soybeans requires only $250, only 23% as much. If soybean futures move one full point, that move is worth $50. If a soybean spread moves one full point, that move is worth $50. That means either a 5 point favorable move in soybean futures or a 5 point favorable move in a soybean spread earns the trader $250. However, the difference in return on margin is extraordinary: In the futures the return is $250/$1,050=23.8%. For the spread, the return is $250/$250=100%. Think about that!
Leverage: This leads us to the next benefit of spread trading—with the same amount of margin, you could have traded 4 soybean spreads instead of one soybean futures. How’s that for leverage? Instead of making $250 on a five point move, you could have made $1,000. Reduced margin spreads offer a much more efficient use of your margin money.
Trend: Earlier I said that spreads tend to trend much more dramatically than outright futures contracts. Not only that, but they trend more often than do outright futures. I don’t have room here to show you the dozens of sharply trending spreads that ca
One of the main issues that affiliate marketers struggle with is how to successfully advertise their product. While you have several advertising options, there are two aspects that are equally important and significantly related that you need to consider. These two aspects are testing an advertising campaign and how much money you should spend on a an advertising campaign.Considerations for testing an advertising campaignOne of the first things you want to consider when testing an advertising campaign is how much of a return on your financial investment you are making. This consideration is actually quite intricate because it involves several aspects. The first of which is how much money you are spending. The second of which is whether or not your advertising campaign is resulting in sales. Ultimately, when you start testing an ad campaign, you want to test whether you are making money or not. The best way to test this is to see how many clicks out of 100 result in sales. This will give you a good idea of what your return on investment is. For instance, let's say you have a product you make $35 per sale and you make 5 sales per one hundred visitors. That results in $175 per 100 visitors. A successful campaign would mean that you spend less than $175 for those five sales. Any amount spent above
ADVANTAGES OF SPREAD TRADING
There are so many advantages to trading reduced margin spreads that I hope I don’t run out of room here before I can tell you all of them. Let’s begin with return on margin, i.e., yield.
Yield: As I write this, the margin to trade an outright futures position in soybeans is $1,050, whereas a spread trade in soybeans requires only $250, only 23% as much. If soybean futures move one full point, that move is worth $50. If a soybean spread moves one full point, that move is worth $50. That means either a 5 point favorable move in soybean futures or a 5 point favorable move in a soybean spread earns the trader $250. However, the difference in return on margin is extraordinary: In the futures the return is $250/$1,050=23.8%. For the spread, the return is $250/$250=100%. Think about that!
Leverage: This leads us to the next benefit of spread trading—with the same amount of margin, you could have traded 4 soybean spreads instead of one soybean futures. How’s that for leverage? Instead of making $250 on a five point move, you could have made $1,000. Reduced margin spreads offer a much more efficient use of your margin money.
Trend: Earlier I said that spreads tend to trend much more dramatically than outright futures contracts. Not only that, but they trend more often than do outright futures. I don’t have room here to show you the dozens of sharply trending spreads that ca
What is trade credit?One of the big differences between consumer and commercial transactions is that most, if not all, consumer transactions are paid in cash or by credit card at the time of sale. Because of this, most consumer businesses never have to worry about extending credit to a customer and can run their operations on an “all cash” basis. This allows them to focus on their core competencies because they don’t have to carry slow paying Accounts Receivables and go through the expense of collecting on such accounts.However, commercial transactions are different. Most clients ask their suppliers to deliver services immediately and then to invoice them for the work, payable 30 days later (also known as offering net-30). In effect, clients ask their suppliers provide them with “trade credit” for 30 days. Although suppliers don’t like offering trade credit, most have accepted it as an industry standard and have learned how to operate and live with it. In fact, some suppliers have even mastered how to offer trade credit and use it to better position their companies with leading clients. Large creditworthy customers, such as the government or large companies, will usually demand trade credit as part of their contract negotiations. Some examples of entities that ask for 30 to 60 day payment term
Leverage: This leads us to the next benefit of spread trading—with the same amount of margin, you could have traded 4 soybean spreads instead of one soybean futures. How’s that for leverage? Instead of making $250 on a five point move, you could have made $1,000. Reduced margin spreads offer a much more efficient use of your margin money.
Trend: Earlier I said that spreads tend to trend much more dramatically than outright futures contracts. Not only that, but they trend more often than do outright futures. I don’t have room here to show you the dozens of sharply trending spreads that can regularly be found in the markets, so we’ll have to settle for a recent one. You’ll have to take my word for it that this sort of trending happens frequently when trading spreads.
Opportunities: Because spreads tend to trend more often and more dramatically than do outright futures contracts, they offer more opportunities for earning money, and they do so without the interference and noise caused by computerized trading, scalpers, and market movers. Spreads avoid the “noise” in the markets. There are numerous reduced margin spread opportunities, enough to keep almost any trader busy. And it is the lack of interference by market makers and shakers that leads us to one of the most important advantage of trading spreads, whether they be reduced margin or full margin.
Invisibility: One of the primary problems with any kind of trading in the outrights, whether it be in futures or stocks, is that of stop running. The insiders love it when they can see your order. Even when your entry or exit is held mentally, they know where it is. They are keenly aware of where people place their orders. That is why they love Fibonacci and Gann traders. They know precisely where those people will place their orders. The same is true for anyone who uses one of the more commonly known indicators. The insiders fade moving average crossovers, and so-called overbought and oversold—regardless of which indicator is used to show either of those conditions. They know when prices have reached the outer limits of the Bollinger Bands, and they know the location of supposed support and resistance, etc. But with spreads, they have no idea of the location of your orders. You are long in one market and short in another. Your position is invisible to the insiders. They can’t run your stop, because you don’t have one. You cannot place a stop order in the market when trading spreads! Your exit point is entirely mental; it exists exclusively in your head. In that respect, spread trading is a more pure form of trading. It is the closest thing in trading to having a level playing field. Could that be the reason you hardly ever hear about spread trading?
Liquidity: Attempting to trade in “thin” illiquid markets is one of the surest ways to encounter serious stop running and bizarre price movements. However, other than occasional problems with getting filled, spread trading does not suffer from a lack of liquidity—which in itself creates more trading opportunities. I would never consider taking an outright position in feeder cattle. Feeders are a thin, illiquid market normally best left to professional interests. But a reduced margin (feeder cattle)-(live cattle) spread is something I look for all the time. Some of the moves in this particular spread are incredible. They are worth hundreds and even thousands of dollars per spread, several times a year. They are highly seasonal in nature due to t
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