Commodity trading is not suitable for everyone. The risk of loss in trading can be substantial. This material has been prepared by a sales or trading employee or agent of Van Commodities, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Van Commodities, Inc. Research Department. Please view our Risk Disclaimer.

What is my maximum risk if I buy a commodity option?

What is the nature and amount of downside risk? In the case of commodity options, your maximum risk that could lose the money that you invested purchasing the options, plus brokerage fees and transaction costs. Regardless of what happens in the market when buying options on futures your risk is limited to your entire investment, yet your profit potential is unlimited. On the contrary, if you sell or grant an option your risk may be greater.

Commodity futures are generally considered more risky than commodity options.