Options Trading Guide

Options Trading Section


 

Options Trading Navigation

Main Home Page
Partners
Tell A Friend about us
Options Trading Online |
Dynamic Options Trading Strategy |
Options Trading Services |
Simulated Options Trading |
Options Day Trading |
Surefire Options Trading |
Learning Options Trading |
Trading Stock Options |
Options Trading Systems |
Trading Currency Options Hotline |
Options Trading Video Dvd |
Options Trading Software Shareware Free |
Commodity Options Paper Trading |
Option Faq Trading Stock Options |
Stock Options Trading Signals |

List of Options-Trading Articles

Options Trading Best seller

Buy it Now!



Best Options Trading products

Sitemap

"Every revolution was first a thought in one man's mind."

by Ralph Waldo Emerson

"What matters in life is not what happens to you but what you remember and how you remember it."

by Gabriel García Márquez

"What matters in life is not what happens to you but what you remember and how you remember it."

by Mercedes McCambridge

"The income tax created more criminals than any other single act of government."

by Barry Goldwater

"Chess is life."

by Bobby Fischer



Social bookmarking
You like it? Share it!
socialize it

Newsletter

Subscribe to our newsletter AND receive our exclusive Special Report on Options-Trading
Email:
First Name:



Main Options Trading sponsors


 

Latest Options Trading Link Added

INSERT YOUR OWN BANNER HERE

Submit your link on Options Trading!



Newest Best Sellers


Welcome to Options Trading Guide

 

Options Trading Article

Thumbnail example. For a permanent link to this article, or to bookmark it for further reading, click here.

Commodities Trading: Purchasing Options To Gain Profit

from:

One of the more common strategies to obtaining massive profits when trading commodities is buying options. It is interesting to trade using commodities as they make excellent speculation vehicles, due to the fact that they are subject to supply and demand movements and may rise and fall intermittently.



If you're the type of investor who seeks instant gratification for your financial decisions, then buying options might not be your best bet. This is because options eventually use their value over time. They expire -- and a person who takes a gamble on the expensive ones might only see himself losing so much more when things don't turn out right.



The strategy



To sum it all up in one statement, you should only attempt to buy options for a profit when particular commmodities have been dwindling for a considerable period already or are hovering just around their lowest levels for a number of years.



Once you've found these, you should then purchase out-of-money call options that have at least one more year to go before expiring and then hope that their value eventually shifts higher.



Identifying what these commodities is really not so difficult. Commodities can range from a sack of nuts to a barrel or oil or what-have-you. However, the only commodities that you can use to boost your option buying wins are the ones that are listed on the futures market. Such commodities include the likes of sugar, wheat and coffee and even copper, gold and crude oil and its many permutations. In short, food stuffs we encounter everyday.



When researching which commodities you'd like to bank your options against, check a commodity's history. This can be done by looking at long-term charts (usually over ten years) to be able to get an idea of a product's high and lows over the past decade.



Then, look for call options that have either been at the losing end of a massive corporate sell off or been dwindling at consistent record lows. Options that are considered volatile (or those that are too dependent on market movements) should be scrapped off your list.



With this strategy, expert advice does not really make the cut. To be able to gain profits by purchasing options in commodities, you have to step out of the loop for a bit, because, ironically, ignorance will do you good at this point. Sometimes, the expert advice given by the people in the loop might only hamper you from trading and might even create doom and gloom scenarios that are uncalled for.



As soon as the market moves higher, you then sell around 25% of your stakes to be able to gain some form of profit. You can also do this if the papers are starting to talk about the particular commodity to gambled in. You should only sell off the remaining stake you have when the market turns parabolic.



Perhaps the most important tip of all is to stay calm if nothing is happening. You should never force a trade to happen. In fact, some say that once you have purchased an option under a commodity, you should forget about it altogether and quit the urge to monitor it every single day. If you see that nothing is happening, leave it alone.



Ulimately, when trading options under commodities, play only with what you can afford to lose, just to be on the safe side. This particular strategy we have here is actually more tricky to execute than it looks, so it might take a while before you finally get that big win. Start small and practice.


Other Options Trading related Articles

Options Trading Video Or Dvd
Commodities Options Trading
Stock Options Trading
Ftse Options Trading
Day Trading Options

Do you want to contribute to our site : submit your articles HERE


Options Trading Specific links

Options Trading News

William A. Porter To Receive Prestigious Options Industry Award - MarketWatch (press release)


William A. Porter To Receive Prestigious Options Industry Award
MarketWatch (press release)
The International Securities Exchange (ISE) operates a leading US options exchange and offers options trading on over 2000 underlying equity, ETF, index, ...

and more »

Read more...


Citigroup, AIG Lure Options Traders - Wall Street Journal


Citigroup, AIG Lure Options Traders
Wall Street Journal
Trading in Citigroup was particularly robust, with investors picking up 1.4 million calls that allow them to buy the bank's stock and 285000 puts that allow ...
Options Intellignece Report : AIG, Citigroup Options Edging UpistockAnalyst.com (press release)
Banking on GameStop (NYSE: GME) moves after earningsONN.tv
Options Intelligence Report: GameStop Options Change CourseistockAnalyst.com (press release)

all 12 news articles »

Read more...


Daily Options Trading for Lululemon Athletica (LULU) - Market Intellisearch


Daily Options Trading for Lululemon Athletica (LULU)
Market Intellisearch
LULU options saw interesting call activity today. A total of 271 put and 1824 call contracts were traded raising a low Put/Call volume alert. ...

and more »

Read more...


Daily Options Trading for DISH Network Corp. (DISH) - Market Intellisearch


Daily Options Trading for DISH Network Corp. (DISH)
Market Intellisearch
DISH Network Corp. options saw high put activity today. A total of 1087 put and 160 call contracts were traded raising a high Put/Call volume alert. ...
Daily Options Trading for Duke Energy Corp (DUK)Market Intellisearch
Options Activity for (XAU)Market Intellisearch
Unusual Trading Activity for AES Corp (AES)Market Intellisearch

all 34 news articles »

Read more...


US INDEX, USD/JPY Flows - NKS: GPIF To Keep Asset Allocations For 5 Yrs - Forexrazor


US INDEX, USD/JPY Flows - NKS: GPIF To Keep Asset Allocations For 5 Yrs
Forexrazor
High-Risk Warning Forex, Futures, and Options trading has large potential rewards, but also large potential risks. The high degree of leverage can work ...

and more »

Read more...