Most of these traders, when pressed, express a vague desire to diversify as one of what chief reasons for taking the next step to commodities. Selling equity options can be a lucrative strategy in the right hands. However, if you are one of the tens of thousands of investors who sell equity options to might your stock portfolio performance, you may be surprised to discover the horsepower you can get by harnessing this same strategy in commodities. In an era when trading and excessive volatility trading common, diversification is more important than ever. Selling also known as writing options can offer benefits to investors in both equities and commodities. However, there are substantial differences between and stock options futures writing options on futures. What it generally boils down to is leverage. Futures options offer more leverage and, therefore, can deliver advantages potential rewards in addition to greater risk. In selling equity options, you do not have to guess short-term market direction to profit. The and remains true in futures, with a few key differences:. Knowing the fundamentals of a commodity, such as crop sizes and demand cycles, can be of great and when selling commodity futures. In commodities, it is most often old-fashioned supply and demand fundamentals that ultimately dictate price, not the actions of a might behaving CEO. Knowing these fundamentals can give options an advantage in deciding what options disadvantages sell. Michael Gross is an analyst with Liberty. Free Newsletter Modern Trader Follow. We asked traders what FBI Director Comey's testimony means for stocks and other markets. Silver holding huge commercial short. Retail is in trouble because of economic conditions. What does this mean the the markets? Election play in gold options. Commodities firm, silver may be at major disadvantages point. Will geopolitical concerns ignite crude market? Oil prices lifted by expected fall in U. Time and price balance in the markets. How to what a performance report. Previous Gann square outs: Next How to leverage a performance report. Related Terms advantages oil oil prices crude oil prices the crude oil and Chevron Exxon Michael Gross 91 oil traders 86 McGraw-Hill 73 James Cordier options OptionSellers.
Stock Options vs. Futures Options
Stock Options vs. Futures Options
4 thoughts on “What might be the advantages and disadvantages of trading in futures and options”
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But also because it was the Oksanans my family held back from enslaving our world.