The preferred commodity futures options trading course is one which not only helps you to understand the "where" and "how" you can trade commodity options, but also describes the kind of option trading strategies that work best for commodities.
The commodities market is the same thing as a futures market,
because most small traders never intend to take delivery of physical
goods - they only want to trade based on their expected future market
prices. Unlike stock trading where you purchase so many shares and hold
them on paper, with commodities, you don't intend to accept so many
barrels of oil, pounds of sugar or BTU's of natural gas. So for the uninformed, the
financial market for commodities is actually the futures market. But you can also take options positions on these futures contracts.
Here is a "wishlist" of desirable features:
1. You want to know who the best brokers are for commodity options trading, what it costs to transact with them, whether their trading platform is any good, does it include charts and can it be used to analyze and place orders?
2. You want to understand the peculiarities of commodities options, particularly the differing leverage scales for each type of commodity. Stock options are based on price times number of shares, but commodities include the extra dimension of the unique way their volume is measured.
3. Your futures options trading course should include some great strategies which minimize your risk and put the advantage of making a profit very much in your favour. You would prefer that some of these strategies should be best suited to commodites only (i.e. not what you find in your average stock options course). This may involve options that trade related commodities markets.
4. You would like access to a list of all the commodities futures you can trade options on and if possible, details which ones are the most liquid and easily traded.
5. A clear set of trading rules which make it easy for you to decide when to enter a commodity options trade, how best to structure the trade and when to exit.
In short, a complete commodity futures options trading course would take you by the hand and lead you into the world of commodities trading. Since commodities are not so well known as stocks as a trading vehicle.
Here are some to consider:
Commodity Futures and Binary Options
Binary options are a recent and increasingly popular form of option trading due to their simplicity and risk vs reward structure. They are not subject to the normal rules of regular (vanilla) options. You simply predict whether an underlying security will be above or below a specified price by a specified time and if you're right, you instantly make an average 70 percent profit. If you lose, you take an 85 percent loss on your investment amount. So the result if binary - two outcomes, right or wrong.
Binary options include a number of commodities as the underlying security. For more information about this means of trading and an associated commodity futures options trading course, see our Binary options strategy page.
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