MF Global

About Trading Options

An option is simply the right, but not the obligation, to buy or sell something at a pre-determined price at any time within a specified time period.

This contract or option gives the buyer the right, but not the obligation, to buy or sell a particular commodity (futures contract) at a certain price for a limited period of time. The option seller, on the other hand, is obligated by this same agreement to buy or sell the commodity stated in the contract, at a certain price, if the option is exercised by the option buyer.

There are two distinct types of options

Put Option - Call Option

A put option gives the option buyer the right to sell the underlying commodity, while a call option gives the option buyer the right to buy the underlying commodity. In case of options on futures, the underlying commodity is a futures contract.

To learn more, view our 21 proven strategies for trading futures options.


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