Nu Insight: An Introduction to Commodity Futures and Options Trading

An Introduction to Commodity Futures and Options Trading

Futures
See Barchart.com:Education:Education Center:Futures 101:
1. Introduction
2. Futures Markets: What, Why & Who
3. The Market Participants
  - Hedgers
  - Speculators
  - Floor Traders
4. What Is a Futures Contract?
  - Physical Delivery Type
  - Cash Settlement Type
5. The Process of Price Discovery
6. After the Closing Bell
7. The Arithmetic of Futures
  - Leverage
8. Trading
  1. Margins
    - Initial
    - Maintenance
  2. Basic Trading Strategies
    - Buying (Going Long) to Profit from an Expected Price Increase
    - Selling (Going Short) to Profit from an Expected Price Decrease
    - Spreads
      - Involves Different Contract Months
9. Participating in Futures Trading
10. Deciding How to Participate
  - Trade Your Own Account
  - Have Someone Manage Your Account
  - Use a Commodity Trading Advisor
  - Participate in Commodity Pool
11. Regulation of Futures Trading
  - Words of Caution
12. Establishing an Account
  - If a Dispute Should Arise
13. What to Look for in a Futures Contract
  See Barchart.com:Futures:Market Pulse:Contract Specifications
  - The Contract Unit
  - How Prices are Quoted
  - Minimum Price Changes
  - Daily Price Limits
    - Limit Up/Down Moves
    - Liquidating a Position May Not Be Possible
  - Position Limits
14. Understanding (and Managing) the Risks of Futures Trading
15. Choosing a Futures Contract
16. Liquidity
  - Volume
  - Open Interest
17. Timing
18. Stop Orders
19. Spreads
20. Options on Futures Contracts
21. Buying Call Options
22. Buying Put Options
23. How Option Premiums are Determined
  - Exercise/Strike Price
  - Time Until Expiration
  - Volatility of Underlying Futures Contract
24. Selling Options
25. In Closing
Options
See Barchart.com:Education:Education Center:Options 101:
1. Introduction
2. Reasons for Using Options
  1. Options Can Be Used for Insurance
  2. Option Buyer Has the Right, But Not the Obligation, to Buy or Sell Commodity
  3. Decision to Exercise the Option Belongs to the Buyer
  4. Option Premium Is the Most an Option Purchaser Can Lose
  5. Option Buyer Is Never Subject to Margin Calls
3. Options Terminology
  - call option
  - put option
  - holder = option buyer
  - writer = option seller
  - premium
  - strike price
  - at-the-money
  - in-the-money
  - out-of-the-money
  - covered option
  - uncovered/naked option
4. Motives for Buying and Selling Options
5. Futures Positions After Option Exercise
6. Option Premium Valuation
  - Intrinsic Value
  - Time Value
  - Relationship of Underlying Future Price to Strike
  - Volatility
  - Time Until Expiration
Options Trading in Real Trading