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Don’t Miss out on Today’s Hottest Trading Arena: Commodity Options!
“The authors have written the definitive work on trading commodity options. Their in-depth knowledge of this subject is legendary among industry professionals and expert traders alike, and their ability to relay their knowledge through text, pictures, and the spoken word is unparalleled in our industry.”
—Lan Turner, CEO, Gecko Software, Inc.
“This book captures the realities of commodity option trading in a simple and easy- to-read presentation that will be beneficial for traders of all sizes and skill levels.”
—Chris Jarvis, CFA, CMT, Caprock Risk Management, LLC
“Even the most experienced investors often overlook the fact that options on futures are fundamentally different from options on stocks. This book fills that gap and sets the record straight with clear and concise descriptions that are easy to understand. Guaranteed to become a true source of value creation for anyone interested in trading commodity options.”
—Jeff Augen, author, The Volatility Edge in Options Trading
“Commodity Options arms readers with the strategies and tactics needed to take a more active approach to managing risk in today’s turbulent markets. The authors exhaustively break down every component of a commodity option to its lowest common denominator, making this book an essential piece of information for those looking to expand their trading tool box or further build on existing option strategies.”
—John Netto, Chief Investment Strategist, NetBlack Capital and author, One Shot—One Kill Trading
Investors worldwide are discovering the enormous opportunities available through commodity options trading. However, because commodities have differing underlying characteristics from equities, commodity options behave differently as well. In this book, two of the field’s most respected analysts present strategies built from the ground up for commodity options. Carley Garner and Paul Brittain begin with a quick primer on how commodity options work, how they evolved, and why conventional options strategies often fail in the commodity options markets. Next, using detailed examples based on their own extensive research, they show how to leverage the unique characteristics of commodity options in your own trades. You’ll walk through trades from “top to bottom,” master both long- and short-option approaches, and learn powerful strategies usually ignored in options books. For example, the authors introduce synthetic swing trading strategies that systematically reduce volatility from the market.
This book’s easy-to-use trading strategies are strategically employed by the author’s clients every day: With Commodity Options, you can work to put the odds in your favor, too!
• Why commodity options are different–and what it means to you
Understand key differences in the underlying assets and the logistics of market execution
• Systematically rewrite the odds in your favor
Four ways to make winning trades more likely–and losing trades less common
• When to trade short options–and how to manage the risk
Why careful option selling may improve your odds of success
• Master strategies designed for diverse market conditions
Combine long and short options to create the right strategy for any market opportunity
• Exploit short-lived trends through “synthetic” swing trading
Get the advantages of futures contracts without the volatility
Option Basics: A Crash Course in Option Mechanics
Download the sample pages (includes Chapter 1 and Index)
Introduction xix
Chapter 1: Option Basics: A Crash Course in Option Mechanics 1
Chapter 2: An Option Is an Option Is an Option…Think Again 11
Chapter 3: Long Option Strategies 35
Chapter 4: Short Option Strategies 53
Chapter 5: Credit Spreads 81
Chapter 6: Limited Risk Option Spreads 95
Chapter 7: Synthetic Swing Trading 105
Chapter 8: The Other Ratio Spreads 129
Chapter 9: Limited Risk Range Trades 139
Chapter 10: Synthetic Long Option Plays 151
Chapter 11: An Option Trade from Top to Bottom 165
Chapter 12: The Wizard of Oddz: Applying Option Strategies in the “Real World” 185
Chapter 13: Margins and Option Trading 197
Chapter 14: Commodity Trading Myths 203
Appendix 211
Glossary 215
Index 251