If you are paying the CME and ICE data feed charges, don’t. Use my strategy and let the markets cover the expense. Continue reading to learn how you can follow this monthly strategy for your trading account.
Options
Trading Option Spreads, While Fading Time Decay
Commodity option contracts are decaying assets. Unlike futures contracts from which they are a derivative, option contract values are lost each day to time decay. Therefore, it is prudent to liquidate long option positions even if the target price is not yet realized before time value diminishes the premium.
Do You Understand Option Expiration, Exercising, and Assignment? Now You Will.
It is essential to understand option expiration, exercising, and assignment as a commodity option trader. Know these principles, whether purchasing outright calls or puts, selling or “writing” option contracts, or using complex option spread strategies. Not only will you be better equipped for such events, but also having this acumen could potentially improve your trading performance.
Get Ready For the Holidays With a Christmas Tree Spread
Learn a different way to combine options to take a specific idea and put it into action.
Option Strategies for Futures Traders: #2 Straddle
We have covered the option tree strategy in the previous post. In the spirit of the campaign season, I had the readers decide which strategy I should cover next. Per the poll results, with forty-four percent of the votes, I present a review of long and short option straddles. Please keep in mind that we… Read more.
Option Strategies for Futures Traders: #1 Option Tree
There are various exotic option strategies with different objectives and theoretical scenarios. I’m going to walk you through the basics in detail, while keeping these complex instruments as simple as possible! In addition, over the next few weeks, we will cover a few prime options strategies for futures traders that benefit from the leverage and… Read more.
Basic Mechanics of Agricultural Options
Learn about Agricultural Options!
Deep Out-Of-The-Money Options: A Calculated Risk
The trading strategy of purchasing a deep out-of-the-money call or put option has been referenced as purchasing a “lottery ticket”. Both present an opportunity for profits but with a low rate of success. Depending on how far out-of-the-money the strike price and time remaining until expiration, it would take a considerable move in the underlying futures market to profit.
Credit Spreads: A Way to Collect Premium with a Defined Risk
Many traders are familiar with collecting premium by selling options, and it has proved to be a profitable strategy. However, the unlimited risk that comes with selling options has kept many on the sidelines, even if they have a strong option on where a market won’t go. Credit spreads offer you the ability to collect… Read more.
Futures Options Spreads: Why Should You Use Debit or Credit Spreads?
One of the main questions I receive as a broker after presenting a futures option spread to a client is, “Why?” Traders want to know why they should be entering an option spread as opposed to purchasing or selling an option outright. This article will help to explain the Why behind entering an option spread.… Read more.
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