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Home / Purchasing Options

Purchasing Options

The Differences Between Buying vs Selling Options

The Differences Between Buying vs Selling Options

September 25, 2019 by Daniels Trading

From active speculation to risk management, traders take advantage of the unique flexibility of options on a routine basis. However, in contrast to standardized futures products, trading options requires a bit more expertise. Let’s examine the mechanics of buying and selling options contracts.

Locking in Profit by Purchasing Options

Locking in Profit by Purchasing Options

June 7, 2011 by Drew Wilkins

One of the most common things you’ll hear a futures trader say is, “Make sure you lock in profits with stops!”  One thing some traders don’t realize is that you can lock in profits with options as opposed to using just a stop loss order.  This article will focus on how locking in profits is… Read more.

Hedging by Purchasing Options: A Margin Free Way of Risk Management

Hedging by Purchasing Options: A Margin Free Way of Risk Management

May 10, 2011 by Drew Wilkins

Talk with any hedger and they’re sure to tell you about an experience with trading on margin.  Margin is a good faith deposit that a hedger must have in their account in order to initiate a long or short futures position.  For example, the margin on a corn contract is currently $2,362.00.  This means that… Read more.

5 Tips for the Option Buyer

5 Tips for the Option Buyer

April 25, 2011 by Nick Metzger

Tip 1:  Have an exit plan. It seems very elementary, but some traders will spend numerous hours looking for opportunities to enter a market, but put no thought into how and when they are going to exit.  Whether you base your trading decisions technically or fundamentally, you will need to know when you are going… Read more.

Options on Futures:  An Introduction to Buying Options

Options on Futures: An Introduction to Buying Options

December 17, 2010 by Drew Wilkins

This post originally appeared in FutureSource’s Fast Break Newsletter, where Drew Wilkins is a regular contributor on various futures trading topics. One of the most common questions a futures broker gets is, “How do options on futures work?”  The truth is, options can be as simple or complex as you want them to be.  This… Read more.

Forget What You Thought You Knew About Buying Futures Options

Forget What You Thought You Knew About Buying Futures Options

December 9, 2010 by Jeff Coglianese

This is a revised version of an article that originally appeared in FutureSource’s Fast Break Newsletter on September 24, 2004. Have you purchased an option position in the past, and had the market move in your favor, only to ultimately lose money on the trade? Read this article and you might get some answers about… Read more.

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

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