Investing and Trading: Futures Options- Strategies

The Blog Entry that Accompanies this Entry is at: http://investorandtrader.blogspot.com/2008/06/futures-options-series-option.html

My Daily Blog is at: http://investorandtrader.blogspot.com/

So, I had that series regarding Futures, and Commodity Futures. What about options on Futures? I've been discussing that.

Ok. We've gone through the Futures, and had a whole series on Commodity Futures. We discussed why options are valuable. We discussed what is meant by the term "Put" option, and "Call" option. We discussed the five components of pricing with the Black - Scholes model.

I will finish up by talking about Futures Options Strategies ...

NOTE: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 12 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research.

Category:

Education

Tags:

• options
• futures
• commodities
• howto
• trade
• stockmarket
• stocks
• forex
• stochastics
• RSI
• MACD
• Covestor
• BlackScholes
• strategies

[sytran666]

isnt a naked put or call writing or selling a put or call?

[AirelonTrading]

@sytran666 Now that terminology is used. We used to call them uncovereds. Now that term is used interchangably w/ nakeds ... which is not exactly how it used to be.

Sort of how everyone uses the terms contango and backwardation nowadays. 12 years ago, we just called it the contract premium spread

[dnichols24]

i can trade futures on sp minis but not on sugar ... what broker you using?

[AirelonTrading]

@dnichols24 At the time that I recorded this video ... optionsXpress

[AirelonTrading]

@AirelonTrading Just remember that it's a 100 shares that you'd have to pony up for each option bought if exercised. But like I said, I like doing this if say, I wouldn't mind owning 2000 shares of a company on a pullback? There is only 12 days left until option expiration? I'd sell maybe 10 put options naked. Even if it goes bad, then I end up owning stock that I wanted anyway (Which I've never had happen) :^)

[AirelonTrading]

@torchlakemi One of my favorite strategies? Is to find a stock that I really would like to own on a pullback? Seeing a very short time period to option expriation (I'm talking 7 to 12 days) - and selling puts on that stock. It's pure income.

[torchlakemi]

@AirelonTrading im trading equities with options but as hedges for ex: ill buy a stock and then buy an in the money put, and i always use money managment principles, but my ? is what do you think about using ITM puts and trading around the postion, such as selling options to take money out and still leaving the upside open (by the way ur vids are very informative) and can the same principles be used in commodities

[AirelonTrading]

You're more than welcome ...

[cosmosgato]

Thanks

[AirelonTrading]

:)

Yeah, if I was going to sell them, the only thing I could think about doing would be covering them with something like Condors, etc.

:)