Statewide FX Inc.: Commodity Trading, Futures, Options, Investments, Commodities, Market

What is an option?

Simply stated, an option is a choice. The purchaser of an option acquires the right, but not the obligation, to buy or sell a particular futures contract at a specific price (the strike price) on or before a particular date (the expiration date). The total cost of an option is the premium plus commission and fees.

How do I buy options?

Options on futures are sold in a "public outcry" system on major exchanges in New York, Chicago and other cities. When you decide to get involved in the options market, your broker will assist you with any questions you may have. We believe our services and execution are excellent. Once you have opened your account, making a trade is as easy as picking up the phone.

What kind of options are available?

There are many options to choose from. Options are traded on over forty different commodities from Corn and Wheat to Silver and Gold; from Treasury Bonds and Stock Indexes to Foreign Currencies. Options are available on most commodity futures. A bullish speculator would buy a call option, expecting the price to go up. A bearish speculator would buy a put option, expecting the price to go down. Options come in at a variety of strike prices and different expiration dates. We will work with you to help you find the right combination of market, price and time to suit your personal trading objectives.

How much do I stand to gain?

Many investors find the benefits of purchasing options attractive. Chief among these benefits are high leverage, substantial profit potential, staying power and liquidity. Remember you can sell your option on any business day during exchange trading hours prior to expiration. In our opinion, timing is the essence of successful trading.

What is my downside risk?

There is a significant risk of loss when you speculate on long options. When you purchase an option on futures you can lose all or part of the total cost of the option, which is premium plus commission and fees. When trading futures, you can lose more than your investment because such investment involve margin.

Past Performance is not indicative of future results. The risk of loss in trading futures and options is substantial and such investing is not suitable for all investors. An investor could lose all or a portion of their investment.
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