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Selling commodity futures options jevep239047431

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The purchase of a put option gives the buyer the right, but not the obligation, to sell a futures contract at a designated strike price before the contract expires.

In commodity markets, buying put options is often a low-risk way to take a short.

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In finance, a futures contractmore colloquially, between parties not known to each other., futures) is a standardized forward contract, a legal agreement to buy , sell something at a predetermined price at a specified time in the future

Futures Options Trading. Futures Options Trading 101 is available free to help both experienced , beginning futures market traders. You may also register free to receive our special advanced options trading info:#39;Options on Futures'. Selling out-ofthe money options removes much of the stress , emotional decision-making that is common in futures trading.
Option selling usually places your position in the market far enough away that short term swings in the market may not dramatically affect your position.

Selling commodity futures options. A commodity futures contract is an agreement to buy , sell a predetermined amount of a commodity at a specific price on a specific date in the future. Buyers use such contracts to avoid the risks
When you sell options, time decay allows you to make money on a trade even if the underlying market stays the same. You can also make money on a trade if the futures market moves against you because the option might not move enough to make up for the loss in time value.

In the latest edition of Carley Garner's beginners' book on commodities, she details everything you need to know about futures and options trading before placing a trade. Active risk management is a must if you intend to sell options on futures contracts.

How do you manage the extra risks involved in selling options on commodity futures.

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1) The first thing an option seller should commit to is not using more than 50% of the available margin in their account. I have been selling options on futures for years.

But it is rare to find others doing it.

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I was wondering if there are others here doing it. I have been doing it for 5 years.

A put option is a derivative of a futures contract.

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