Options

Stock Options vs. Commodity Options The Futures Advantage

Why Equity Option traders should consider adding Futures Options to their Portfolios By James Cordier, Michael Gross, Portfolio Managers, Liberty Trading Group/OptionSellers.com If you are reading this seminar, I am about to make several assumptions about you. I am assuming you are somewhat of

Options for Rookies

Mark D. Wolfinger Do the words “stock options” make you uneasy? Without quite knowing why, do you have the feeling that stock options are dangerous and should only be used by speculators? You have plenty of company. Many people are under the same misconception. Do you drive a car? Would

Core Market Knowledge for Options Traders

By Martha Stokes, C.M.T. © copyright 2007 all rights reserved. Any time leverage is used in trading, it creates inherently higher risk. Therefore, it becomes even more critical for options players to have a foundation of knowledge that goes beyond the extremely narrow scope of “options strategies

Managing SPAN margin to maximize returns

The SPAN margin system used in futures can not only provide high returns on invested capital, it encourages responsible risk management By James Cordier, Michael Gross, Portfolio Managers, Liberty Trading Group/OptionSellers.com When I was a young man in college, three of my friends and I de

Trading Options on Futures

By Jim Wyckoff A while back, I received several emails from readers wanting to know if they should short the crude oil market because of its lofty price levels. I responded that I don’t give specific trading recommendations, but I certainly do want to help m

The Vocabulary of Options Trading

These are some of the major terms you should become familiar with, starting with what is meant by an “option.” An investment vehicle which gives the option buyer the right—but not the obligation—to buy or sell a particular futures contract at a stated pric

The Mechanics of Buying and Writing Options

Commission Charges Before you decide to buy and/or write (sell) options, you should understand the other costs involved in the transaction—commissions and fees. Commission is the amount of money, per option purchased or written, that is paid to the brok

The Arithmetic of Option Premiums

At the time you purchase a particular option, its premium cost may be $1,000. A month or so later, the same option may be worth only $800 or $700 or $600. Or it could be worth $1,200 or $1,300 or $1,400. Since an option is something that most people buy with the i

Selling Options: The Real Story

There are old sayings in the futures industry that go something like this: “Eighty percent of all options on futures expire worthless.” And, “The only way to make money trading options on futures is to sell them–not buy them.” Neither one of these st

Selling Options

At this point, you might well ask, who sells the options that option buyers purchase? The answer is that options are sold by other market participants known as option writers, or grantors. Their sole reason for writing options is to earn the premium paid by the op