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FAQ's #4

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Why have commodity options on futures become such an increasingly popular investment?


Commodity options make it possible to realize a potentially substantial profit, in a short period of time, with a limited-risk investment. Under no circumstance, can the loss exceed the cost of purchasing the option including transaction costs. Other advantages include:

  • The leverage inherent in options.
  • The liquidity provided by established competitive option markets.
  • The flexibility to respond rapidly to market opportunities.
  • The ability to follow the value of your investment on a day-to-day basis.
  • They staying power to weather temporary price setbacks without incurring additional risk or cost.
  • Freedom from the margin calls that many other leveraged investments are subject to.
  • Strict federal and industry regulation to which options trading is subject.
  • The ability to buy and sell quickly due to market liquidity.
  • There is no guarantee that any of these advantages will result in profits.

Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.

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