What Are Options?

1) About Options
A1) Buying.
Have you ever wondered why famous authors write of profits of over 1,000 to 10,000% in their Options books? Because those type of occurrences do happen. Buying Options can be a great way to get started in Futures. The purchaser of an option's risk is limited to the money he or she spent buying the option. Below is a graph demonstrating the difference between a Call options purchase versus a position in the futures market. {Insert Picture} The first position is a call. The second position is the Purchase of a futures contract. The breakeven line is different symbolizing the premium paid for the Call Option.

B1) Selling.

According to the CME, 80% of all Options expire worthless. What happens to the poor persons that bought those expiring options? They simply lost their money to the Options sellers. Most statistical studies indicate that markets tend to drift sideways over 68% of the time. This is where the depth of options markets come into play. An education of how Options work is needed before you start writing or shorting options. Option selling is for persons that have the risk tolerance, the financial and personal wherewithal to handle unlimited risk trades. Options selling takes decision making just like any other trade. The Education provided at Easy Commodity options.com will help you get to the place of becoming an Options PRO. The difference between the uninformed Joe Q. public and the professional options player is information. Before you start, arm yourself with the information neccesary to take Joe Q. Public's money when he wants to buy an option.

Strategies

Risk Level

Conservative: Buying Puts and/or Calls. Buying straddles and/or strangles.

Intermediate: Bull and Bear spreads, Long Butterflies, Long Condors. Short butterflies and strangles occasionally. Calendar spreads.

Aggressive:
Option selling. Short strangles and straddles. Ratio spreads, Credit spreads. Diagonal credit spreads. Calendar spreads using seasonal volatility patterns. Back Spreads.

Resources

1) Mentoring: George Haralson 800-656-0443