T-Bond Put Fly

_{OPTION TRADE OF THE DAY!}

4-21

T-Bonds are currently in a downward trend and we are buying “put-fly’s” in an attempt to take advantage of the market while maintaining a limited risk exposure. According to our projections, there is a strong chance that the bond market could or should be trading between 123 and 117 come the last week of May. We are buying the June 123 put, selling two June 120 puts and then buying the June 117 put for a premium of 33 tics or $550 not including transaction costs, this would also be your maximum exposure. Your profit potential is limited to $3,000 before cost considerations. On a trade like this, if the market is above (123) or below (117) the spread, another spread to consider would be the 122/120/118. This spread is running about $250 with a profit potential of $2,000. Of course more aggressive traders would find a bear put spread with a naked leg more exciting. Good Luck

_{PLACING CONTINGENT ORDERS SUCH AS “STOP LOSS” OR “STOP LIMIT” ORDERS WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS. SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.}

_{Past performance is not indicative of future results.}

_{The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.}

_{FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE}

_{PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE}

_{INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON}

_{THE UNDERLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT}

_{AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY,}

_{OR OUT-OF-THE-MONEY OPTION. FURTHERMORE, THE PURCHASER}

_{WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS}

_{RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION’S STRIKE}

_{PRICE COMPARES TO THE UNDERLYING FUTURE’S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES}

_{MOVE IN TANDEM WITH FUTURES PRICES. IN FACT, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING}

_{FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR}

_{EVEN MOVE IN THE OPPOSITE DIRECTION OF THE UNDERLYING FUTURES CONTRACT.}

_{To receive this type of information by email, send your info to pbrittain@alaron.com}

_{Paul Brittain}

_{Alaron Trading}

_800-935-6492

_702-255-4107

_{702-256-0186 fax}

_{pbrittain@alaron.com}