Learn about Four of the Biggest Mistakes in Trading Futures to steer clear of so you can avoid becoming a statistic.

Over the past year it has become more difficult to generate profit and increase value to an investor’s portfolio.  Gone are the days of “throwing magic darts at the stock page.”  How can an investor profit from the current “sideways market conditions” or protect themselves from a possible downturn in the market without much effort?  I believe that if the investor looks into stock index options, they might find additional strategies to help them along their investment path. 

Why Stock Index Options?

Because stock indexes tend not to be as volatile as individual stocks.  And options on the stock indexes such as the S&P 500 are very liquid, allowing for less slippage in pricing.  Using stock index options, and credit spreads, an investor can possibly generate monthly income, as well as help offset losses in their stock portfolio.  These strategies can be used for risk management, and be tailored to fit a bullish, bearish, or neutral market outlook.

What is a Credit Spread?

A credit spread consists of two options of the same type (2 calls or 2 puts) and the same contract month expiration.  You sell one option at a particular strike price, which you collect premium for, and you buy another cheaper option at the same time.  This limits your risk on the option you sold.  Because you are selling a more expensive premium option than the one you are buying, you take in a credit.  Your risk is the difference between the two strike prices, less the net premium you collected, plus commission and fees for placing the trade.  By placing the trade as a spread, you never expose yourself to unlimited risk.

The objective of selling option spreads is that both options expire worthless and you get to keep all the premium collected from the sale.  It is a way to take advantage of time decay in a limited risk strategy.  More>>>>>>

Choosing an options on futures specialist or futures broker is one of the most key selections you will make as an options and futures investor. Someone you can trust and rely on if you are going to trade futures and commodity options.

Mercury Capital Management, your source for futures and options trading, is a premier futures broker for individual investors.  Futures and options traders rely on Mercury Capital Management.

Where Are You At In The Trading Curve?
Whether you're new to futures or an experienced trader, or learning more about options and the strategies to use, we want to be your options or futures broker. Explore the pages on our site. If you have any questions, give us a call or email us.

 Choose Mercury Capital Management.

There is a risk of loss trading futures and options.  Past performance does not necessarily indicate future results. Trade with risk capital only. Commodity trading is not appropriate for all investors.  Read our full disclaimer.

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