An Intro To Options On Futures

Tom Sosnoff and Tony Battista provide an introduction to options of futures. They discuss some of the unique aspects of options on futures and what you should be aware of before beginning to trade them ======== tastytrade.com ======== Finally a financial network for traders, built by traders. Hosted by Tom Sosnoff and Tony Battista tastytrade is a real financial network with 8 hours of live programming five days a week during market hours. Tune in and learn how to trade options successfully and make the most of your investments! http://goo.gl/EaF69C Subscribe to our YouTube channel: http://goo.gl/Szl24S Watch tastytrade LIVE daily Monday-Friday 7am-3pmCT: http://goo.gl/EaF69C Download our mobile app, Bob the Trader: http://goo.gl/zgIyco Follow tastytrade on Twitter: https://twitter.com/tastytrade Become a fan of tastytrade on Facebook: https://www.facebook.com/tastytrade Follow tastytrade on LinkedIn: http://www.linkedin.com/company/tastytrade Follow tastytrade on Instagram: http://instagram.com/tastytrade Follow tastytrade on Pinterest: http://www.pinterest.com/tastytrade/

Comments

1. Why can't options on futures be traded in an IRA account?
2. I sell OTM options on futures. I agree not all commodities/futures are very liquid, but when you stay with the more liquid ones, an individual investor doesn't have a lot of problems with liquidity. Also, premiums on futures options are higher and strike prices are wider, in my opinion. Furthermore, especially commodities options have a more fundametal basis to them, then stock options have. Soybeans doesn't have a CFO cheating on taxes for example...
   
   If you don't want physical delivery (in this case a futures contract) simply dont hold your option through expiration! If the market would come so close to my strike, I would have been out anyway... But I agree, a bit more consistency would be nice :)
3. I'm not sure I quite understood the part about selling an option for $2 that goes to 0 and only making $1. Are you saying that if I sell a futures option for $2,000, and the time value goes to zero with the option out of the money I only keep $1,000 of that premium?