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By www.ProfitableTradingTips.com
 There are many profitable day trading
       strategies that can be applied to trading
       commodities.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 Markets move up and down and speculators
       on the evolving prices of commodity futures
       use both fundamental and technical analysis
       in order to gain a profit.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 A means of limiting risk and leveraging
       capital when trading commodities is trading
       futures options.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 A trader can buy puts or calls on a commodity
       futures contract just as he or she can buy puts
       or calls on a stock.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 In trading futures or trading futures options
       one is not buying or selling the commodity.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 Both futures contracts and options contracts
       are derivative instruments. In this the base
       equity could be crude oil.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 A trader can engage in oil futures trading or
       trading futures options on crude oil.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 The same applies to live cattle, winter wheat,
       gold bullion, and many other tradable
       commodity futures.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 The commodity futures market is used by two
       groups of traders.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 The first group includes companies and
       individuals that buy and sell commodities
       such as gold bullion, crude oil, or soybeans.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 These folks buy and sell futures or engage in
       trading futures options to hedge business
       risk.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 Let’s say that an agricultural cooperative sells
       winter wheat produced by its members.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 The price of winter wheat may fluctuate
       greatly as there is a drought in North Dakota
       and heavy rains in the Ukraine, both major
       wheat growing areas.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 If these conditions continue wheat prices will
       be very high by the time that harvest comes.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 But, if the weather improves in one or both
       areas the price of wheat may fall
       dramatically.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 Obviously the cooperative would prefer to be
       paid well for the coming harvest.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 One way to insure this is to sell futures on
       winter wheat.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 The price is currently high (in this
       hypothetical example).




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 However, what if the weather in North
       Dakota and the Ukraine gets worse and there
       are hailstorms in Kansas further decreasing
       the total harvest?




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 By trading futures options the cooperative
       retains the right to sell at the contract price if
       the market price falls.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 It also preserves the right to not execute the
       option and not sell at the contract price if, in
       fact, the market price climbs higher.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 By not ever entering a futures contract but
       rather buying options, the trader does not
       need to tie up money in a margin account for
       the futures contract.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 The other group of traders is composed of
       speculators.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 They pick and choose which commodities
       they wish to trade and engage in trading
       futures options on a wide range of
       commodities,




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 depending on where there is market volatility
       and the chance for a profit.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 These traders may use tools such as trend
       following in day trading or scalping in day
       trading in order to gain incremental profits as
       the market moves up and down.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 Because a market speculator does not need
       to hedge risk on a specific commodity he can
       profit from trading futures options




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 on a variety of commodities, moving in and
       out of trades as opportunity and profits
       dictate.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
 For more insights and useful information
       about trading stocks, commodities,
       currencies, and options, visit
       www.ProfitableTradingTips.com.




http://www.profitableinvestingtips.com/investing-trading/trading-futures-options

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Trading Futures Options

  • 2.  There are many profitable day trading strategies that can be applied to trading commodities. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 3.  Markets move up and down and speculators on the evolving prices of commodity futures use both fundamental and technical analysis in order to gain a profit. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 4.  A means of limiting risk and leveraging capital when trading commodities is trading futures options. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 5.  A trader can buy puts or calls on a commodity futures contract just as he or she can buy puts or calls on a stock. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 6.  In trading futures or trading futures options one is not buying or selling the commodity. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 7.  Both futures contracts and options contracts are derivative instruments. In this the base equity could be crude oil. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 8.  A trader can engage in oil futures trading or trading futures options on crude oil. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 9.  The same applies to live cattle, winter wheat, gold bullion, and many other tradable commodity futures. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 10.  The commodity futures market is used by two groups of traders. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 11.  The first group includes companies and individuals that buy and sell commodities such as gold bullion, crude oil, or soybeans. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 12.  These folks buy and sell futures or engage in trading futures options to hedge business risk. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 13.  Let’s say that an agricultural cooperative sells winter wheat produced by its members. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 14.  The price of winter wheat may fluctuate greatly as there is a drought in North Dakota and heavy rains in the Ukraine, both major wheat growing areas. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 15.  If these conditions continue wheat prices will be very high by the time that harvest comes. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 16.  But, if the weather improves in one or both areas the price of wheat may fall dramatically. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 17.  Obviously the cooperative would prefer to be paid well for the coming harvest. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 18.  One way to insure this is to sell futures on winter wheat. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 19.  The price is currently high (in this hypothetical example). http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 20.  However, what if the weather in North Dakota and the Ukraine gets worse and there are hailstorms in Kansas further decreasing the total harvest? http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 21.  By trading futures options the cooperative retains the right to sell at the contract price if the market price falls. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 22.  It also preserves the right to not execute the option and not sell at the contract price if, in fact, the market price climbs higher. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 23.  By not ever entering a futures contract but rather buying options, the trader does not need to tie up money in a margin account for the futures contract. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 24.  The other group of traders is composed of speculators. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 25.  They pick and choose which commodities they wish to trade and engage in trading futures options on a wide range of commodities, http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 26.  depending on where there is market volatility and the chance for a profit. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 27.  These traders may use tools such as trend following in day trading or scalping in day trading in order to gain incremental profits as the market moves up and down. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 28.  Because a market speculator does not need to hedge risk on a specific commodity he can profit from trading futures options http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 29.  on a variety of commodities, moving in and out of trades as opportunity and profits dictate. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options
  • 30.  For more insights and useful information about trading stocks, commodities, currencies, and options, visit www.ProfitableTradingTips.com. http://www.profitableinvestingtips.com/investing-trading/trading-futures-options