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Learning the Secrets of Futures Options

Futures Options traders have had the advantage of making use of the leverage that this market is offering. They also have benefited from the commodities market because of its liquidity and the special taxation laws that are applied. Those who are still new in this market have to learn some of the best trading techniques in order for them to stay on top of the game. Strategies like “free trade” may provide them the edge in the futures market where major movements may happen. As one of the option buying strategies, traders have to look when there are low option price quotations in the market.

Traders simply wait when the projected major movement in the market will occur which in turn will increase the volatility of the options. The situation will contribute to the increase in the option prices as well. Options traders can look for another선물옵션 option that may have nearly similar price as the one that they have bought earlier. This will result to a vertical spread without having to let go of the cash. Traders may earn profit because of the differences in the strike prices between the two options. They may engage in endless “free trades” without cash commitments as they earn profits because of price differences.

Futures options traders can also make use of the straddle strategy. They can buy call options and put options at the same time. However, traders have to see to it that they have the same strike prices and the same date or month of expiration. Whatever direction the market will take, they will be able to earn profit from one of their options although rendering the other options to be worthless in the end. What they can do is to convert the profitable side into one of their free trades. It is important the traders must sell the option at a price that will cover both options that were bought when they opted to use the options straddle strategy.

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