THE COMMODITY OPTIONS STRATEGY

Let's say that you've been watching a particular commodity and now have a hunch as to where prices might be going. You may have formed this hunch based on a news article or industry report, or perhaps a buy or sell signal was generated by a trading system such as MarketClub, or perhaps this hunch is based on your own technical analysis of prices. Let's also say that you have some risk capital set aside. Of the option buying strategies described in this site, how do you decide which is the best? The answer depends upon your hunch, in particular, by how much do you expect prices to move and when. The more precise are these answers, the better you'll be able to select an appropriate strategy. The flow chart below provides a general guideline.

Once you have decided on the appropriate commodity options strategy, you can find information on executing the buy transaction and managing the trade under the pull-down menu, TRADING TIPS, found at the top of this page. OPTION TRADES at the top of this page provides practical examples of using these commodity option strategies for select markets.