Now that you know options basics, or even if you don't, it may be time to explore one of the best kept secrets in the business - options on futures.
Most of the same options strategies apply when using options on futures, but now you can apply them to many more markets. Instead of just stocks and stock index options, with options on futures you can trade many more markets, most of which are uncorrelated.
From unleaded gas to soybeans and silver, with options on futures you can apply your best options plays to a multitude of markets covering currencies, grains, metals, exotics and bonds. And option on futures have some intrinsic advantages not found with basic options on stocks.
For example, you can combine options on futures with futures positions, like you might with options and stocks, but with a whole lot less margin.
With the start of this new column I hope to provide an educational fountain of information about the world of options on futures. I have found that the key to success in this business is diversification of trading styles.
Therefore, all you OEX, S&P E-mini and stock options traders (beginner to expert) are welcome here if you are interested in learning about options on futures and the trading approaches that can be used with these unique financial derivatives. |
