I'm a paragraph. Click here to add your own text and edit me. It’s easy. Just click “Edit Text” or double click me to add your own content and make changes to the font. Feel free to drag and drop me anywhere you like on your page. I’m a great place for you to tell a story and let your users know a little more about you.
Options can be used like insurance policies to limit losses on a futures contract.
They can also be used for speculative purposes, whether you are selling options to receive premium income or using options to establish a position in a particular commodity, index or interest rate.
As hedging instruments, options can produce offsetting gains in the face of adverse price changes in the cash market.
Options permit you to efficiently deploy capital, in the form of option premium. In this case, you can participate in the price movements of the underlying asset, without having to buy the asset outright.
So when it comes to options on futures, both buyers and sellers have an array of choices to efficiently deploy their capital, while expressing their opinion or managing their price risk in the marketplace.