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All futures are bought and sold on margin. Profit and loses are magnified. The risk of leverage puts you at a risk of losing substantially more than you put in.
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∙ 10y ago
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What are some common trends in commodity option trading?
Two common trends in commodity option trading are; 'Futures and Sell option' (buy a future contract for a certain month and sell an option contract for that same month) and 'Buy Futures and Buy Options' (buy both the future and option contracts in order to protect yourself in case one goes lower).
What is a commodity option trading system?
In commodity option trading each contract will have a different implied volatility. Traders in commodity options have a different perception of risk in that it is bi-directional.
What exactly is bought and sold in option trading?
Option trading is the buying and selling the right and responsibility to purchase a commodity at a set price - this is called an 'Option' to buy or to sell. The commodities in question can be anything - foodstuffs, minerals, or even other investments or currencies. Many people involved in options trading are not actually interested in purchasing or selling the commodity. Instead, they plan to sell their 'option' to someone else - either someone who does want the commodity, or someone who has a complementary option, which can be used to 'close', or finish, the 'option'.
What does the Commodity Futures Trading Commission do?
The Commodity Futures Trading Commission is an independent agency which helps regulate futures and option markets. They have been commissioned into the general market since the 1970s.
Where could one get a commodity trading education?
There is not a college major especially for commodity trading and one is not required. However, most commodity trader's have a degree in finance or business. Most major universities offer these degrees. Another option is to take part in a trading commodity internship instead of or in conjunction with the college degree.
What are the essentials to a commodity trading system?
The essentials to a commodity trading system are being aware of the different commodities available, knowing risks for each option, and a good brokerage firm to trade through. If you want to trade those are the basic essentials.
What can be expected of a commodity option broker?
One can expect from commodity option broker to receive an advice on derivatives such as option. Moreover, a commodity option broker can use his or her expertise to make the best decision for you for options.
What are the provisions of the Commodities Exchange Act of 1922?
This act, along with its later amendments in 1936 and 1975, subjects commodities, commodity futures, and option trading to federal supervision and restricts trading to futures exchanges
Where can one practice commodity option trading online?
Moneycontrol, Chicago Board of Exchange (CBOE) and Chicago Board of Trade (CBOT) all offer online commodity training advice. As well, the Commodity Futures Trading Commission generally has an office in most major cities and is available for advice and training.
What is CFD trading?
A CFD trading, or Contract for Difference, is an agreement between two parties to exchange the difference between the opening price and closing price of a contract. Trading option to trade the change of price in multiple commodity and equity markets, with leverage and immediate execution.
How can someone get into a company that does forex option trading?
You would want to speak to someone about forex option trading. The two primary options are called spot, or single option trading, and call/put option. You can make a very good amount of money if you invest it into trading.
What is the option to sell shares of stock at a specified time in the future called?
It's actually called a call option. I will provide you with a definition I just found for this, and some additional tips on options trading. - - - - - The option to sell shares is a put. The option to buy them is a call.
