Free Online Trading Lessons Archives

Not all Options are Created Equal: Stock Options vs. Commodity Options

When: September 1, 2016 5:30 Eastern (2:30 Pacific)

Many traders interested in migrating from stocks to commodities assume their stock option trading skills will translate into the commodity markets. However, despite the fact that calls and puts have similar mechanics regardless of the underlying instrument, their similarities stop there. Differences in trading logistics, environment, and characteristics can put unprepared traders at a disadvantage. That said, those with proper education and familiarity might find some glaring advantages to trading options on futures relative to stock options.

• What are the key differences between trading options on stocks and options on futures?
• How does increased leverage change the options trading landscape
• Commodity margining is more affordable for option spread traders, and option sellers
• Accessible portfolio margin for commodity traders
• Commodity option market liquidity
• Importance of choosing the right commodity broker
• Exercises and assignments in commodities vs. stocks

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