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All About Options Trading
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Options are perhaps the most versatile of all the trading instruments in the market today. They cost a lot less to transact than stocks. And because of this, traders are able to considerably limit the risks linked with a certain transaction.
There are basically two kinds of options: call options and put options. Call options give the trader the right to purchase assets, while the put options give yout the right to sell.
The good thing about options is that because they are exercised at a specific time frame and its rates are based on a set price, the risks that you stand to face are controlled and limited.
If you are buying call options, you are likely to benefit from this condition. On the contrary, if you are selling put options, you may keep the value of the options you laid out on the table if these are not picked up and bought within the time frame specified.
The expiration date is the deadline set by both parties on when the stock option should have been traded or sold. The option should not stay for too long on an investor’s hand because doing do would make it void, especially after the expiration date.
Best put, holders of put options have the obligation to sell, while holders of call options have the obligation to buy.
How are options traded?
It is definitely as easy as trading regular stocks and equities in the stock market.
There are buyers and sellers of stock options that abound and roam around the market.
Be reminded that stock options are named such because these are actually options. These shares are special and unique in the sense that the are different and are treated differently compared to the regular and normal stocks and shares traded in the market.
The price tags are also somehow different most of the time to the current and prevailing stock prices of a particular stock. Usually, stock options are traded at premium prices, or in other words somehow higher than the usual trading price of the stock in the market. But this is a very small price compared to the amount of protection options give you against risks, compared to common stocks.
There are issues that are thrown at stock option trading. One of these issues is the question on the timing of the granting of such stock options.
Because stock options are usually given to top executives, some people and analysts are suspicious that those executives determine the proper timing for the issuance of the stock options.
They would, according to allegations, intentionally make the timing coincide with the low pricing of stocks. Because when the stock prices are low, more options could be given to the recipients.
These executives can then choose to hold on to their stock options until the time when share prices are rising. Thus, they generate more money from the stock options trading transactions.
That issue and problem regarding stock options is now being reviewed and looked at by different regulating agencies around the world.
Commodity Options Trading News
Copper Traders Turn Bullish as Inventories Drop to 2009 Low: Commodities - Bloomberg
 Bloomberg | Copper Traders Turn Bullish as Inventories Drop to 2009 Low: Commodities Bloomberg Hedge funds and other money managers are holding their biggest bet on rising prices since early August, Commodity Futures Trading Commission data show. Inventories tracked by the London Metal Exchange are already at a two-year low after global mine ... |
Rajesh Bhayani: Comexes wait for critical mass - Business Standard
Rajesh Bhayani: Comexes wait for critical mass Business Standard Within the three national commodity exchanges that started trading in late 2003, for instance, MCX has branded itself the exchange for metals and energy, NCDEX is known for trading in agri-commodities and National Multi Commodity Exchange, ... |
CFTC Requires Registration by Mutual Funds With Commodities - Bloomberg
CFTC Requires Registration by Mutual Funds With Commodities Bloomberg The US Commodity Futures Trading Commission adopted rules requiring registration by mutual funds when they have investments in commodities. The five-member commission voted 4-1 to approve the rule in a private voting process, the agency said today. Federal agency looking at high-frequency traders |
CFTC PRECIOUS METALS: Funds Stock Up On Gold For 4th Week - Wall Street Journal
CFTC PRECIOUS METALS: Funds Stock Up On Gold For 4th Week Wall Street Journal ... according to Friday afternoon data from the Commodity futures Trading Commission. The number of long positions, or bets on higher gold prices, in Comex gold futures and options held by traders in the category increased by 13681 contracts to 179384. |
Open interest in natural gas at a record - MarketWatch
Open interest in natural gas at a record MarketWatch By Claudia Assis SAN FRANCISCO (MarketWatch) -- Money managers have flocked to natural-gas futures, according to data from the US Commodity Futures Trading Commission late Friday. It showed combined futures and options open interest at 3.6 million ... |
CFTC-Speculators add to net longs in NYMEX/ICE natgas - Reuters
CFTC-Speculators add to net longs in NYMEX/ICE natgas Reuters NEW YORK, Feb 10 (Reuters) - Money managers in natural gas futures, options and swaps added to their net long position for the third straight week, according to data from the US Commodity Futures Trading Commission released on Friday. |
Risk & Energy Risk - Commodity Rankings 2012 - energy - Risk.net
Risk & Energy Risk - Commodity Rankings 2012 - energy Risk.net Traders spent much of the year being whipsawed by volatility, while on both sides of the Atlantic they pondered the effect of new regulations that threatened to completely reshape the business of commodities trading. Against this backdrop, Morgan ... |
NYMEX-Crude falls on Greek, oil demand worries - Reuters
 Moneycontrol.com | NYMEX-Crude falls on Greek, oil demand worries Reuters Hedge funds and other large investors rdfaised their net long positions on NYMEX crude oil futures and options by 4440 contracts, to 205709, in the week to Feb. 7, the Commodity Futures Trading Commission said. * The US trade deficit widened to $48.8 ... Commodity Trading Trends: Crude Making Its Way Up? Oil prices fall Friday on Greece deal doubt, but they're up on the week |