From the November 01, 2012 issue of Futures Magazine • Subscribe!

Trading cattle, hogs and ETNs

Exploring options

Options may be used to leverage potential gains based on ETNs. For example, on Aug. 24, 2012, listed COW puts and calls with four expiration dates ending at April 2013. “January 2013 COW calls” (below) is the regression curve analysis based on ask prices for six calls. Delta, the change in the call price per unit change in the ETN price, extends from 0.036 for out-of-the-money options to 0.876 for in-the-money.

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