Question about commodity trading, specifically light sweet crude? - commodity option prices
I am thinking of making a play on oil. I want to bet a certain type of contract that oil prices will be higher than buying next fall, for example, in November or December 2007. I'm not sure what would be the best and easiest for me to make this work. I would like an investment as an option only if the risk premium. Are there options on oil? I found the futures contracts on oil, but I think you have a risk of unlimited loss in the futures contract? I like the fact that the decline is limited to a purchase option. Advice or suggestions would be greatly appreciated.
Wednesday, January 13, 2010
Commodity Option Prices Question About Commodity Trading, Specifically Light Sweet Crude?
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6 comments:
Use (ETF) is the best choice, but make sure to read these
http://moneycentral.msn.com/content/P148 ...
The choice of whether an option for the future or the future depends on how much capital to use at risk, and how we protect your position now that you have decided on the uptrend, too. Depending on the situation is not as important as managing the position you set.
You can long the contract in December barrels of crude oil, and place a hedge by short. As the price rises, you can short for taking profits, so the risks of an anterior position is not covered.
With options you can by buying the put option in December and ATM coverage with an ATM diciembre Long put - what is known as a seal. If the mosquito is too expensive for your taste, use a strangle and buy the purchase and sale of OTM December.
However, you will get your site (s), the collection of market and the trend is the easy part. It is the most difficult to manage the trade, like many of us are more interested in his or her right to be profitable. Make sure the manThe average age of the creation of risk coverage for themselves and meet the strict rules that limit their losses to trade.
If you have more specific questions, please contact me at Liverpool in derivatives jkinard@liverpoolgroup.com group.
Yes, there are options on crude oil.
In fact, the monthly options, and the strike
Price 50 cents.
NOT futures, unless
You really know what he's doing.
View raw options are ungodly expensive.
There are strategies such as taking a long position in a call
say $ 55 (A and say, December 2007), then a short circuit
Near (eg March) 65 calls. This way, you can choose from
made available.
I can not take the time to explain all the strategies of reporting options (and more or less), but a good
Futures brokers can.
I use Future Dain Rauscher in Minn Mn
1-800-888-7885.
Addendum: I checked with Dan and
56 décembre Appeals is $ 6 ($ 6000).
December crude oil was trading around $ 55.
Hope this helps.
Just buy an ETF of light crude oil.
There are different ways to play oil. Future is a risky and expensive ways. The site shows 4 different ways.
There are different ways to play oil. Future is a risky and expensive ways. The site shows 4 different ways.
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