FUTURES OPTIONS TRADING An out-of-the-money option has no intrinsic value. A second factor that adds value to an option is time. A third factor contributing to the value of an option is the volatility of the market
An out-of-the-money option has no intrinsic value. A second factor that adds value to an option is time. A third factor contributing to the value of an option is the volatility of the market. FUTURES OPTIONS TRADING
Margin in Options Trading For an option buyer,there is no margin cost per se;there is only the cost of the premium plus commission costs
For an option buyer, there is no margin cost per se; there is only the cost of the premium plus commission costs. Margin in Options Trading
Exit Alternatives The option seller,or writer,has no discretionary choices available once the option is sold and the premium has been received. All of the decision-making power lies with the buyer,who has three choices
The option seller, or writer, has no discretionary choices available once the option is sold and the premium has been received. All of the decision-making power lies with the buyer, who has three choices. Exit Alternatives
Advantages of Options Trading The most popular and popularized advantage is that an option has limited and known risk. A second advantage of options trading offers is leverage. A third advantage of options trading is staying power
The most popular and popularized advantage is that an option has limited and known risk. A second advantage of options trading offers is leverage. A third advantage of options trading is staying power. Advantages of Options Trading
Disadvantages of Options Trading Although the loss exposure is limited and known,a loss is still a loss,and several limited losses in a row add up to a large loss
Although the loss exposure is limited and known, a loss is still a loss, and several limited losses in a row add up to a large loss. Disadvantages of Options Trading