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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 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 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.
Where can one purchase the Option Trading System online?
A person can purchase the Option Trading System online from several different places. Some of these places include Trade Dominator and Options Trading Authority.
How do you register for option trading?
You can actually easily register for option trading online on your computer. There are a couple different companies offering free trials such as Emini Trading.
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.
Where might an individual learn more about online option trading?
At Scottrade you can learn more about online option trading. They have a live agent you can chat with to answer your questions. They can tell you the risk and characteristics of the standardized options also.
Where can one find free option trading strategies?
There are many resources online that provide free option trading strategies. Another avenue is to contact your bank and inquire about trading with a financial advisor.
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
