Futures For You by Carley Garner
MORE HIT, LESS MISS
It seems like commodity option liquidity is hit or miss. Can you provide some tips on markets to avoid, those I should focus on, and tips on navigating them appropriately with respect to the liquidity they provide?
I tend to be an advocate of trading options. Whether the strategy is to buy and sell options to hedge futures positions, or to trade options and option spreads outright, it is almost always a more conservative approach than simply taking a position in a futures contract. This is because option trading has the potential to offer traders more room for error. I donít know about you, but I need all the leeway I can get!
With that said, not all option markets are viable contenders for speculation. Some involve challenges that green traders might not recognize until itís too late. Further, even if they are aware of the obstacles, they might not necessarily know how to effectively manage them. Here are a few tips and tricks for speculating in commodity options.