Options Press

The Ins & Outs Of Commodity Options


Futures

Futures Magazine
6/1/2008
By Christine Birkner

Due to strong demand, rising fuel and input costs and restrictions on world exports, agriculture markets have experienced record volatility in recent months. One way to profit from price volatility while limiting your risk is through the use of options.

There are many advantages to trading options instead of the underlying futures. Controlling risk, particularly in today’s volatile markets , is one of the greatest advantages...

...Mark Longo of The Options Insider.com notes that margin requirements on futures contracts can be expensive, but commodity options let futures traders reduce risk in their portfolios and “allow market participants to trade commodity contracts with smaller initial investments and with much higher leverage...”

...Longo says the protective put strategy can become expensive in the midst of high volatility, so he suggests that traders offset the expense by combining the protective put with a covered call. In this position, known as a collar, “the revenue from the covered call increases your downside protection and also offsets the cost of the protective put,” Longo says, adding that the collar position “is very popular with fund managers and others looking for low-cost ways to reduce their portfolio risk.”



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The Options Insider Radio Network

The Options News Rundown

Your source for the most important news and information from the world of options.

The Options News Rundown

The Options Insider Radio Network

All of our radio programs in one convenient place.

The Options Insider Radio Network

Options Insider Radio

The original options podcast. Features interviews with leading options figures.

Options Insider Radio

The Option Block

This high-octane program features education, analysis, strategies and unusual activity.

The Option Block

Volatility Views

The premier radio program for volatility traders.

Volatility Views

The Long And Short Of Futures Options

Your source for futures options information.

The Long And Short Of Futures Options

The Advisor's Option

Arming advisors with the info necessary to manage risk.

The Advisor's Option

Options Boot Camp

Get into peak options trading shape.

Options Boot Camp

Options Insider Special Events

Compelling panel & special event recordings from the options world.

Options Insider Special Events

OIC's Wide World of Options

A dynamic mix of current events, investor resources, & strategy insights.

OIC's Wide World of Options

Trading Tech Talk

We break down all the amazing technology that takes your trades from the click of a mouse to the clearinghouse.

Trading Tech Talk

Options Playbook Radio

Break down cutting-edge options strategies and learn how to incorporate them into your portfolio

Options Playbook Radio

Options Oddities

We track all the unusual options trading activity on Options Oddities.

Options Oddities

This Week in Futures Options

The program designed to help active futures options traders stay on top of this ever-changing marketplace. 

This Week in Futures Options

The Business Show

If you like business, if you like humor, if you like stock symbols, this is the podcast for you.

The Business Show

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