Once you understand the options trading strategies described on this educational web site, you'll be able to easily apply them to almost any market, whether stocks, futures, forex or even the cash markets of say, gold or bonds. In what follows, we will concentrate on buying options on futures or commodities, whether calls or puts, and buying option spreads because they provide trading opportunities across a diversity of markets, many of which are in the current headlines and are of particular interest to many investors.

Option buying strategies have the advantage that risk of loss is known at the start and limited yet they still provide the versatility to trade essentially any price expectation, in many cases, leaving the upside potential open. Selling options naked, meaning that the option position is not protected or hedged by another, offsetting position whether that be another option, a futures contract, or even a cash exposure, entails risk similar to that of an outright futures position and may not be appropriate for the beginning options trader. For that reason, it will not be treated here. More information on commodity futures trading can be found under the content index pull-down menu on the blue WLF Network Navigation Bar at the top of the page.

This site, by choosing to focus on buying options, differs from most other option-related sites. Beyond this, there are two other features that distinguish this options trading site from others:

Firstly, only those option-buying strategies most relevant to the beginning trader are explored. The criteria are that the strategies must have limited risk, be fairly easy to understand and, for those with modest amounts of trading capital, be affordable. While some extended options strategies are introduced with further details freely available by request, they are not allowed to confuse or overwhelm the main educational objective.

Secondly, the site gives considerable attention to the practical aspects of buying options. So, in addition to theory, the beginning options trader will find topics on deciding the proper option-buying strategy, executing the option purchase, managing the options trade and even how options are treated in the account statement. The strength of this content draws from the author who has experience trading options on futures.

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Start by moving sequentially among the topics under the pull-down menu PREPARATION. Under OPTION TRADES, you'll find examples of buying options using actual prices, whether buying calls, puts or options spreads for various markets that will help reinforce the material taught. TRADING TIPS contains select topics that you don't often find in options literature. Under FREE STUFF, you'll find a few options-related trade videos and a very popular online options tutorial, all free. Before trading with actual dollars, we recommend that you practice in a free futures and options paper trading account. It's an excellent learning tool for hands-on experience and you'll have the support of investment professionals should you wish it.

While this web site was designed to be accessible to all, especially the beginning options trader, that is not to say that buying options is appropriate for everyone. As with any type of investment, it should be carefully considered along with your personal tolerance for risk and available risk capital. This web site will help you make an informed decision.