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  1. eHow
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  3. Commodities, Options & Derivatives
  4. Futures & Options

Futures & Options

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  • Fundamental Options in Futures Trading

    A futures contract is an agreement that binds one person to purchase a set amount of a commodity or financial product -- such as corn, oil or stocks -- at a specified point in the future. The other person agrees to sell the product for the specified price when the time comes. The agreement takes place in a futures market, where many buyers and sellers compete to secure the best deal.

  • How to Decline a Job but Keep the Option Open for the Future

    When much of the country is suffering through high unemployment, the idea that a worker has the luxury of declining a job offer may not sound like a problem at all. Nevertheless, some highly skilled candidates may find themselves faced with the serious professional dilemma of how to gracefully decline a job offer without burning the bridge entirely.

  • What Is the Biggest Difference Between an Option & a Futures Contract?

    The two most common securities are stocks and bonds. However, there are also are other securities out there that are not as well-known. Two of those securities are futures and option contracts. The contracts do have similar characteristics but there is one big difference between the two that affects the pricing of the contracts.

  • Future Vs. Forward Contract

    A futures contract is a standardized forward contract. In finance, the two words often appear interchangeably, however, the two types have two differences. First, either party can negotiate anything in a forward contract while the terms of futures contracts have set guidelines. Secondly, futures are traded on established exchanges whereas forward contracts trade over the counter on unregulated message boards or privately between two traders.

  • How to Calculate the Futures of 30-Year Treasury Bonds

    Treasury bond futures offer investors interest-rate exposure with a minimal capital outlay by means of leverage. Each futures contracts represents the obligation to purchase or sell an underlying set of U.S. Treasury Bonds at a specified future date and predetermined price. 30-Year Treasury Bond contracts are the longest maturity debt issued by the U.S. Treasury and fluctuate significantly with changes in interest rates due to their extended cash flow stream.

  • How to Calculate Treasury Bond Futures

    Treasury bond futures are contracts that allow investors to acquire the right to buy or sell a bond on a specified future date for a predetermined price. The contracts' underlying assets are government obligations issued by the U.S. Treasury. Futures contracts trade on exchanges and play a key role in market economies by facilitating hedging and speculation. (Editor: see References 3 and 4)

  • Difference Between Foreign Currency Options & Futures

    Currency trading involves taking a position on the relative value change between two different currencies. Buying a large amount of foreign currency to profit from a small change in relative value is not efficient, so traders use derivative securities that leverage the value changes between currencies. The futures markets allow trading on a wide range of currencies plus trading of options against those futures contracts.

  • Daytrading for Beginners

    Many beginning investors wish to get involved in the fast-paced world of day trading because of the potential for high returns in a short period of time. When you choose to get involved in this market, you must understand the basics. Otherwise, you could lose all of your trading capital very quickly.

  • Options Vs. Future Contracts

    Options and futures are financial contracts that were both created as a form of insurance against future price surprises. Once a contract is created and sold, it becomes a financial security, which can be bought and sold by others over the life of the contract. Both futures contracts and options contracts have an expiration date. While both types of contracts share similarities, there are important differences as well.

  • Do Futures Have Daytrading Regulations?

    A day trader buys and sells the same stock over the course of a single day in an attempt to profit from price volatility. The U.S. Securities and Exchange Commission has determined that day trading is extremely risky, so it has established special rules pattern day traders must abide by when they trade stocks. Futures are exempt from SEC pattern day trading rules.

  • Futures & Options in the NSE

    Futures and options are legal contracts that represent an agreement between a buyer and a seller. These types of contracts are sometimes referred to as derivatives, as they derive their prices from underlying stocks, commodities or other financial securities they are written on. Derivative contracts have been available on India's National Stock Exchange (NSE) since the early part of this century.

  • Options for Trading in Futures

    While some investors stick to paper assets such as shares of stock, others prefer to put their money into tangible goods such as gold, soil or wheat. These items are known as commodities, and are often traded on a regulated exchange, although some investors choose to buy them directly from producers. Although trading in commodities is risky, there are a number of ways in which investors can attempt to make money.

  • Taxes on Futures & Options Trades

    With stock futures, an individual purchases a contract to purchase a bundle of shares at a future date. With stock options, a trader will purchase an option that gives him the right to purchase or sell a stock at a particular price before or on a specific date. Individuals usually use futures and options to hedge their positions against short-term volatility in the stock market. When investors and traders trade options and futures for a profit, they will pay capital gains taxes in the United States.

  • Differences Between Options & Future Contracts

    Options and futures contracts are financial derivatives of underlying assets. While many investors choose to make a direct investment in a particular asset, others use contracts to either limit their exposure or utilize alternative investment strategies. The difference between options and futures comes down to the rights versus obligations of investors.

  • Stock Daytrading Strategy Secrets

    The popularization of the Internet in the late 1990s brought the concept of day-trading stocks within reach of anyone with a computer and a checking account. No longer were investors forced to call trades in to their broker and live with the mystery of when and at what price the trade would actually execute. With the capability of executing dozens, even hundreds, of stock trades daily, the lure of earning an "easy" living from home often overshadows the fact that it is hard to turn a profit.

  • How to Check My MIO Balance

    MIO Money is a pre-paid reloadable MasterCard. You can use the card anywhere MasterCard is accepted worldwide to make purchases, payments and ATM transactions. Purchase a MIO Money card at a grocery store for an average cost of $9.95, according to the MIO website. The MIO Value Plan offers free direct deposit or you can reload your card at a participating retailer for an average cost of $4.95. Using the card allows you to control your spending as you control your card balance. Check your MIO card balance before using the card to avoid transaction denials.

  • Futures & Options Investments

    Investors who branch out into the futures and options markets are often looking for an alternative to traditional investments. In reality, these investments can present both added risk and added potential for investors. Both allow you to speculate on prices without actually taking possession of a security or commodity.

  • Daytrading Technical Analysis

    Day trading is a method of speculating on the daily movement of stock prices. Day traders do not hold a stock position for more than a day, so most do not care about the financial condition of the company they trade stock in. Instead, many day traders rely on technical analysis to help them anticipate future price direction. Technical analysis is an examination of price movement on a stock chart. Much like forecasting the weather, technical analysis cannot predict the future, but helps traders determine what is most likely to happen.

  • Trading Wheat Future Options

    Trading wheat futures is a difficult, yet exciting, speculative venture that can be lucrative when things go as planned, including the weather. The use of wheat dates back more than 10,000 years, and it is one of the most actively traded grain commodities. Though you probably have no intention of taking delivery of 5,000 bushels of wheat, you can participate in finding the price for wheat.

  • Futures Vs. Commodities

    Many investors choose to put their money into commodities -- fungible goods often bought and sold on an exchange. In many cases, commodities are bought and sold in the form of futures contracts -- contracts that guarantee their holder the delivery of a certain commodity on a certain day at a set price. The terms "commodities" and "futures" are sometimes used interchangeably, but they are not the same thing.

  • Energy Futures and Options

    Energy futures and options are types of derivatives with energy commodities such as oil or coal as underlying assets. They are essentially contracts that guarantee the sale of such commodities in the future. Like other financial instruments, the trading of energy futures and options is often based on the speculative nature of the financial markets.

  • What Are Futures Stock Markets?

    The futures markets are where investors and trading professionals experience liquidity, transparency, volatility and opportunity. Traders in this market credit commodities as being more transparent, or having more regulation leading to financial disclosures, than the stock market where equities are bought and sold. Sophisticated financial instruments known as derivatives are traded in the futures markets. For the aggressive and successful trader, the rewards can be lucrative. Futures are traded around the clock in major cities across North America, Europe and Asia.

  • What Are Options & Futures?

    When traders look for a way to diversify away from the stock and bond market, they often end up trading futures and options. Getting involved in the futures and options market gives you the opportunity to speculate on the price of goods or securities without actually owning them at any point.

  • Options for Trading Commodities

    Investors wishing to trade commodities have two primary options: Commodity futures and commodity exchange-traded funds, or ETFs. A commodity is a raw good, such as crude oil, gold, copper, iron ore and agricultural item that is traded on a specialized commodity exchange. Commodity investments provide investors with opportunities to diversify portfolios and take advantage of potential rising commodity prices in an increasingly globalized economy.

  • Futures Trading Advice

    Futures are a form of financial derivative. A financial derivative is an investment vehicle, the value of which is based on an underlying security. A futures contract is a binding agreement between two investors to transfer a particular amount of a predetermined security at some point in time for a predetermined price. The two types of futures traders are hedgers and speculators. Hedgers transfer their risk to speculators who hope to make a profit off of that risk.

  • Advice for Trading Options

    Trading stock options can be risky, however the correct trading strategies can reduce risk while increasing profitability. Various factors play a role in the stock options market. Some of these include, price and market volatility. Diversification of stock options portfolios is also important to success in the options trading market. Educating oneself about the stock options market will help to minimize risk.

  • Why Invest in Futures?

    A futures contract is an agreement to carry out an asset sale at a future date at a fixed price. The two parties will make or lose money based on the difference between the fixed sale price and the actual prevailing price of the asset on the agreed sale date. It's possible to sell the position in the contract to another investor before the completion date. This means the futures contract is an asset in its own right, known as a derivative (as it derives its value from the underlying asset).

  • Secrets of Trading Futures

    There are many different types of investments in the market. The two most common are stocks and bonds. Another commonly used investment vehicle is the derivative. That is, derivatives track the prices of real assets. One type of derivative contract allows investors to speculate on the price of a commodity in the future -- these contracts are referred to as "futures."

  • Portfolio Risk in Options and Futures

    The risk of including options and futures in an investment portfolio hinges on the intended use. Many fund managers, businesses and investors hedge (finance terminology meaning to protect) against risk by buying options and futures; however, trading in options and futures carries considerable risk.

  • What Is the Risk for Options on Futures?

    Commodity futures trading allows traders to set up highly leveraged positions on the future price of commodities, stock market indexes, interest rates and currency exchange rates. Leverage allows large profits but can lead to large losses if the trader guesses wrong. Trading options on futures allows a trader to control some of the downside risk.

  • How Futures & Options Work

    In the world of finance, futures and options are ways of making money or saving money when the price of an asset changes over time. Investors and businesspeople who enter into these kinds of contracts are betting on locking in a price on buying or selling an asset, and they profit or lose money depending on whether the asset's price moves in the desired direction.

  • Trading Futures & Options for Beginners

    If you want to diversify an investment portfolio or try your hand at day trading, futures and options may be a suitable choice. Making money in futures and options markets depends on your ability to predict movement in prices, allowing you to buy and sell contracts at a profit as prices on underlying assets go up and down. This makes futures and options trading an intense process, and it offers the potential for high profits in a short time but with high levels of risk as well.

  • Future Option Trading Tutorial

    Professional traders wager large sums of money on the movement of equity, commodity or currency prices, with the potential for very large returns on small initial investments. Trading is about more than just profit, however. Traders test their own brain power, predictive abilities and stomach linings as they leverage assets and explore techniques. For experienced traders, futures options can provide both a challenge and the potential for rapid profit.

  • What Are Commodities & Futures?

    In lieu of purchasing shares of stock in companies, some investors choose to place their money in more tangible assets. One of the most tangible forms of liquid assets available to investors is the commodity future. Traded on exchanges just like stocks, futures are a form of security that entitles investors to the receipt of a given amount of a good on a certain date at a certain location.

  • Benefit of Futures and Options

    Futures and options both allow investors to speculate about the future of stocks and the activity of the stock market. Futures are essentially a contract for a future payment (in this case, a future payment of stock) that can be bought and sold, while options are the ability to buy or sell a certain number of shares of stock at a certain price for a set period of time. While some investors are intimidated by futures and options, they can provide an excellent opportunity to grow investments.

  • Futures Trading FAQ

    Futures are discussed at the end of any daily market report, but few people know what they are, how they work or what influence they have on an average investor. Futures are an interesting study for those looking to diversify a portfolio, become day traders or just to better their understanding of the free market economy.

  • Information on Futures & Options

    Futures and options serve two distinct groups of people: hedgers and speculators. Hedgers are producers and users of various goods who want to reduce the risk of rising or falling prices. Speculators are willing to assume risk in an effort to generate return. The interaction of both of these groups provides liquidity to the markets and helps reduce the incidence of sudden price shocks and prevent interruptions in the supply of goods and services.

  • Futures & Options Explained

    Futures and options have many similarities, but there are also significant differences when it comes to risk. Many commodities have both futures and option markets. In fact, the correspondence of the two markets provides for trading strategies that use both kinds of contracts in conjunction.

  • Daytrading Secrets

    Stock day traders buy and sell the same position over the course of a trading day. They avoid the risk of overnight surprises by closing any position before the market closes. Most day traders are not concerned with a company's fundamentals, such as profits, which can move the price of a stock over time. Instead, they attempt to profit from volatility in the market.

  • What Are Gasoline Futures?

    Futures contracts allow buyers and sellers of commodities to lock in prices for the future delivery of those commodities. Commodities, including gasoline, trade with standardized contracts on the various commodity exchanges. Gasoline futures can be used by producers and buyers in addition to traders trying to make a profit from the short term change in the price of a gallon of gasoline.

  • Daytrading Tools

    Day traders are dependant on tools to analyze trends, know exactly where the current price of a stock is trading and instantly execute purchases and sales. Fortunately, recent advances in technology have enabled the creation of an exciting array of powerful day trading tools. Writing in his 2011 publication, The Complete Day Trader, author Jake Bernstein states that contemporary day traders now have tools at their disposal that are utterly fantastic when compared to the tools used as recently as the 1990s.

  • Commodities, Futures & Options

    Occasionally, the terms "commodities" and "futures" are used interchangeable, and some investors use the term "options" where referring to similar financial products. In fact, all three terms have different meanings, although all three can be used when referring to the trading of commodities contacts, such as those traded on a financial exchange. A commodity is the asset being traded, while the a futures contract is the contract giving title to the asset. An option is the right to buy one of these contracts at a future price.

  • How Does a Futures Option Loss Affect Taxes?

    A futures option gives the holder the right, but not the obligation, to purchase (via a call) or sell (via a put) a particular futures contract before the option expires. You report profits and losses from futures options as either long-term or short-term capital gains/losses. Since you typically hold options for under a year, losses are usually treated as short-term capital losses. However, the IRS has special rules that may allow you to reclassify a portion of your short-term capital losses as long-term.

  • Great Daytrading Strategies

    A day trader actively buys and sells stocks, options or other financial instruments within the same trading day, usually ending the day with all positions closed. With the up and down nature of the market, over half of the investors who attempt to make a living in day trading fail, according to Investopedia. It's important to rely on successful strategies that provide the best chance of seeing a return on your investment.

  • How to Price Futures Options

    A futures contract is an agreement to buy or sell at a future date a specified amount of a particular asset at a pre-agreed price. An option on a futures contract gives the holder the right to purchase (via a call) or sell (via a put) a futures contract. The calculation of a futures option is similar to that of a stock option, except that futures don't pay dividends. A mathematical function known as the Black-Scholes model is used to calculate futures option prices.

  • How to Make a Living Daytrading

    Day trading can be a difficult, yet rewarding occupation. The biggest challenge facing a day trader is having proper funding as well as a positive outlook when it comes to achieving a high return on your investment. In order to succeed when it comes to day trading you must gain substantial knowledge of the financial markets.

  • Daytrading Tips

    Day trading involves purchasing stocks at the beginning of a day and selling them before the market closes at the end of the same day. Day trading accounts for approximately 15 percent of the NASDAQ's daily trading volume, according to the U.S. Securities and Exchange Commission. Day trading is extremely risky and stressful, because the stock market fluctuates significantly throughout the day.

  • Why Do Traders Invest in Options & Futures?

    Options and futures are derivative trading securities that derive their values from an underlying stock, security or commodity. Options and futures may be preferred by traders to trade for short-term profits compared with buy-and-hold securities for long-term investors. Traders also must be able to trade in a down market as well as a rising market.

  • What Are Futures Funds?

    A futures fund is a type of pooled investment called a managed futures account (MFA). MFAs are professionally managed investment vehicles that trade futures contracts and options on futures. Individuals have had access to MFAs since 1980. In the U.S., the Commodity Futures Trading Commission (CFTC) oversees the futures industry. Investors may find MFAs attractive because they exhibit a low correlation to equity markets, facilitating diversification of assets. Many MFAs are organized as hedge funds.

  • How to Register My Mio

    A design award-winning brand of car navigation systems, Mio's sole product is the Moov Series, a line of navigation models that offer high-definition screens, text-to-speech capability and pre-loaded maps. If you own a Mio navigation system, which includes the Moov Series or the Moov S-, R- or M-Series, you must register your product online for Mio Advantage, a members-only benefit package that offers chat-based or online tech support, product information and updates and personalized offers.

  • Difference Between Futures & Options Trading

    Futures and options contracts are two common types of derivative financial instruments. Both derive their value from underlying assets. Investors enter into these contracts for a variety of reasons, including hedging purposes to reduce risk and speculation to return profit. Despite these similarities, these two types of derivative instruments are fundamentally very different.

  • How to Register Canon Products

    Registering your Canon product ensures that you are notified of firmware and software upgrades as soon as they are available. When you register your product, you also receive the benefit of your product's information being securely stored in case of theft or loss. The information can be used to file an insurance claim. You can also be among one of the first people to know of new products being offered by Canon. Registration can be completed online.

  • How to Use Delta in Futures Option Trading

    Delta is one of the option "greeks," a group of statistical measurements relating to price changes in options. Delta is the most significant option greek and is used to compare price changes in the futures and options markets. Using delta in options trading is one way to gain an edge and is a useful tool for managing risk.

  • Introduction to Futures & Options

    Futures and options are separate investment vehicles, but they are also related in a number of ways. Futures are contracts that allow investors to speculate on the future value of some kind of commodity or financial asset, while options are derivatives of the futures markets. Because futures and options are interrelated, investors may choose to trade either market or trade both markets as part of a comprehensive investment strategy.

  • Futures & Options Terminology

    Futures trading typically refers to the purchase or sale of commodity items, which may include financial instruments and currencies, or bulk goods such as oil, metals, grain or livestock. A futures contract outlines the specific amount and type of the commodity in addition to the future delivery date. An option on a futures contract gives the buyer or seller the right to purchase or sell the futures contract at a set price until the expiration date of the option. The terminology for trading futures and options can be confusing to outsiders.

  • Interest Rate Futures & Options

    Futures and options are common types of financial derivatives that are used to manage the risk of a portfolio of securities. Interest rate futures and options are specifically tied to debt instruments such as Treasury bills or bonds. Because the value of a debt instrument changes as interest rates change, investors purchase these contracts to hedge their portfolio against fluctuations in interest rates.

  • How to Trade Out of the Money Futures Options

    In the futures markets, participants exchange futures contracts that represent agreements to buy or sell an underlying asset at a specific price sometime in the future. Futures options are derivatives in that they give owners the right to enter a futures market at a specified price. There are options to buy (calls) and options to sell or short a market (puts). An out of the money call is an option to buy above the current futures price. An out of the money put is an option to sell below the current futures price.

  • Contracts & Options for Futures

    The futures market is attractive to some because of the large returns achievable through the use of leverage. While increased leverage presents increased risk, options on futures provide many hedging strategies against losses. In futures and options terminology, "going long" refers to buying and "going short" refers to selling.

  • Advice About How to Trade Futures & Options in India

    The Indian futures market is very similar to other futures markets in that it is divided into options and contracts and further subdivided into call and put categories. Each one has different strengths and weaknesses, meaning the right one for you depends on your capital available, investment needs and ability to assume risk.

  • How to Trade In NSE Futures and Options

    Trading in futures and options is an investment strategy best suited for intermediate and advanced investors, but it is not recommended for the beginner. Futures and options either are a hedge against risk or a way to pursue a higher risk profit. It all depends on whether you are the buyer or seller.

  • Secrets of Futures Options

    Over the years, experienced futures traders have greatly benefited from the futures and commodities markets' characteristics such as its added leverage, high liquidity and even its special taxation rules. However, its benefits can be enhanced even further when using futures options. Certain option strategies take advantage of the characteristics offered by the futures markets.

  • How to Trade Futures & Options for a Beginner

    Futures and options are not as widely traded as stocks. However, these markets often offer better returns than the stock market because of the leverage involved. If you are a beginner, there are a few things you should learn before trading futures and options.

  • Basics of Options and Futures

    Stock options and futures are stock derivatives that give investors alternative investment options. Both investment options have a profit potential, but many investors use options and futures as a way to hedge investments from risk. Learning how to execute these strategies can help beginning investors prevent excess risk exposure.

  • Define Options & Futures

    Options and futures are the two most common forms of derivatives. A derivative is an investment instrument or financial contract whose value is dependent upon or derived from the price of another underlying asset. The purpose of derivatives is to manage price risk that exposes investors to potential losses. Learning options and futures can be daunting, as a UC Davis professor has publicly admitted. It is easier to think of it as insurance against investment losses.

  • Options for Bond Futures

    Bond futures contracts allow traders to make interest rate direction trades on bonds of different maturities. Bond futures can also be used to protect the value of a bond portfolio. The market value of bonds fall when interest rates rise. A bond portfolio could be protected or hedged by trading short bond futures of the appropriate maturity. Bond futures trade against a range of U.S. Treasury securities. Futures traders must put up a margin deposit of $500 to $3,000 for each contract.

  • Layman's Definitions for Futures & Options

    Knowing how specific investment instruments operate is the key to sound investing. Investing in securities you do not fully understand can mean the difference between losing some of your investment or losing all of it. Futures and options are similar in some regards, but the differences can put the ill-informed investor in a messy place.

  • Meaning of Futures & Options

    Futures and options are derivative contracts that get their values from other securities or products. Futures and options are popular with traders for short-term trading and can be used as hedges by institutional money managers. There are distinct similarities and differences between futures and options.

  • Introduction to Futures & Options Markets

    Options and futures are investment products that allow investors to profit from changes in the market price of a variety of assets, including stock market indices, commodity prices, interest rates and the prices of individual stocks. They are also used as a tool for hedging: stock options can be used to eliminate the risk of losing more than a certain amount of money.

  • How to Trade Stock Futures & Options

    Stock futures and options are both derivatives. That is to say that their prices are derived from the underlying stock that they represent. When you are buying stock futures or options, you are not buying the actual stock itself, but rather you are entering into a binding contract between buyer and seller.

  • How to Use Options for Protection on Futures

    Futures contracts obligate you to buy or sell a quantity of a security or commodity at a stated price for delivery at a future date. Options confer the right to buy or sell the item at a "strike price," but don't obligate you to do so. By itself, either type of trading promises large potential profits but only if you accept equally high risk. If you combine offsetting options and futures contracts, you can retain much of the potential profit while greatly reducing the risk.

  • Advantages of Options Over Futures

    Options and futures are two popular asset classes for investment trading. They both offer significant leverage over the underlying asset and the ability to make large profits on a relatively small investment. Options provide some features and advantages that may make them more attractive to a trader.

  • How to Teach Beginners to Trade Futures & Options

    Professional traders are often like professional athletes in that while they can perform at a high level of skill, it can be tough to explain and pass that skill on to someone else. This is unfortunate because knowing how to teach beginners to trade futures and options is crucial when you want to mentor someone to help him excel. Fortunately, there are a few key principles to follow when helping an aspiring trader in the futures and options markets.

  • Gas Futures Options

    Futures contracts and options on futures contracts are derivative securities. Futures options on gasoline can be used to trade or hedge the future wholesale price of gasoline. Using futures or options on futures, an investor or trader can set up positions to generate profits from the expected price movement of gasoline, up or down.

  • How to Measure Investment Returns of Portfolios Containing Futures & Options

    Options provide investors with the right, but not the obligation, to purchase shares at a predefined price. Futures are actually a type of options contract. A futures contract obligates a buyer to purchase a certain asset at a certain price (strike price) in the future. The contract provides a standardized way for traders to trade assets, which lowers the risk inherent in the transaction. The best way to measure investment returns on options is to mark the options to market before calculating the return.

  • How to Calculate a Coffee Futures Options Premium

    Calculating a coffee futures options premium is an essential skill for anyone involved in the options market. The premium is the amount the option seller receives from the option buyer. The premium of a coffee futures option constantly changes in accordance with changes in the underlying coffee futures price.

  • How to Calculate a Coffee Futures Option

    While calculating the price of a coffee futures option may seem like a complicated task at first glance, it's easy if you know what numbers to look for. The coffee options market, like all commodity options markets, is derived from an underlying commodity futures market. Once you find out how the futures market is priced, you can calculate options prices with ease.

  • Information on Investing in Futures & Options

    Futures contracts can be complex investments that usually only represent a small portion of an investor's portfolio due to the high risk associated with futures investments. Including options in your investments will give you added flexibility and versatility. Investment can be a tricky and risky endeavor, so it is best to do as much research as possible before building your portfolio.

  • Advice for Trading Commodities, Futures & Options

    When looking for advice on trading commodities, futures, and options, you often find that most traders concentrate on tips and advice rather than solid principles to follow. The best-performing traders in the world often find that the best advice is to devote yourself to intelligent speculation, don't lose money, and run with your winning trades.

  • How to Hedge Futures Contracts With Options

    There are two kinds of participants in the futures markets; hedgers and speculators. While hedgers and speculators purchase futures contracts for slightly different reasons, both groups are attempting to maximize profits and limit losses. The best way to achieve these goals is to buy options as a hedge against potential futures contract losses.

  • Futures Options Strategy

    Futures contracts are standardized contracts for the delivery of a specific amount of a commodity at a future time. Futures have also evolved to cover financial instruments such as stock indexes, interest rates and foreign currencies. Option contracts trade against many futures contracts, allowing traders to hedge or speculate on the value of the underlying future.

  • Tricks for Futures & Options

    Options and options on futures are called derivatives. These are contracts to buy or sell specific commodities (in the case of futures) or stocks (in the case of options) at a predetermined price on or before a predetermined date. Derivatives give the holder the right, but not the obligation, to buy (or sell) the underlying stock or commodity at a preset "strike price" on or before a preset "expiration date". Stocks are traded on stock market exchanges, and derivatives are similarly traded on derivative exchanges.

  • Futures & Options Examples

    Once you understand basic concepts such as "strike price" and "underlying stock," learning about derivative instruments such as futures and options becomes much easier.

  • Tutorial for Futures & Options Trading

    Options and futures trading are complex investment vehicles, which can be very risky and should be used with caution. That being said, the potential for gain with these two investments is very high.

  • Futures & Options Procedures

    When you trade futures contracts, you rarely take possession of the commodity, currency or financial instruments being transacted. That’s because you are purchasing the right to buy or sell at a certain price on a certain date, not the item itself. With options, you rent this right. Exchanges allow you to do this for very little money down, allowing the risk-adverse to hedge and risk takers to speculate.

  • Futures & Options FAQ

    Futures and options offer a variety of investment possibilities. Speculators trade the options and futures markets in hopes of turning a profit while others use the markets to hedge existing positions. Almost all financial markets have corresponding futures or options markets and some futures contracts have corresponding options.

  • Basics About Future & Options Trading

    Two sophisticated financial instruments, futures and options can help investors leverage their portfolios, as well as hedge their risk.

  • How to Buy Futures & Options

    Futures and options have similar elements that investors should know in order to trade these securities successfully. Futures and options also use considerable leverage which will invariably affect an investor's trading style. The measurement of risk is important. Options provide a controllable amount of risk. Futures do not.

  • The Difference Between Options & Futures

    Options and futures are two types of derivative securities, meaning their value depends on the market price of some other item of value (often called the underlying security). Both options and futures feature buy (call) and sell (put) contracts that enable you to leverage trades, increasing potential profit and risk. However, options and futures are very distinct types of securities, with different rules, contract forms, markets and risks.

  • How to Invest in Futures & Options

    Investing in futures and options is really a series of consecutive trading positions. This is because futures and options have regular expiration dates that cause the trader to close existing positions at expiration and open new positions at longer expiration dates. Traders must always be aware that they are trading a leveraged proxy for a more valuable underlying security such as oil, gold, stocks, bonds, or agricultural products.

  • Definition of Prefabricated Homes

    Prefabricated homes have undergone a recent makeover in name and concept. Now recognized as "modular homes," they are a tailor-made alternative for individuals who own a plot of land and plan on living in the home for a lifetime. Today's modular homes offer a home buyer plenty of options while saving them time and money over traditional construction methods.

  • How to Become Wealthy

    Becoming wealthy is a state of mind that differs with each individual and cannot be done without an investment strategy to obtain this goal. Become rich, either by living a comfortable lifestyle or through hard work and savings, with ideas from a futures and options floor trader in this free video on personal finance.

  • How Do Bonds Work?

    Bonds are investment tools that companies use for loan purposes to break up debt into smaller monetary increments. Invest in bonds, which can come in 10 or 15 year payoff periods, with tips from a futures and options floor trader in this free video on personal finance.

  • Where Can I Invest in Nanotechnology?

    Investing in nanotechnology involves finding companies that specialize in this practice and researching what the companies are about. Discover more about investing in nanotechnology and historical trends of investing in other types of technology, with insight from a futures and options floor trader in this free video on investing.

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