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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.

FREQUENTLY ASKED QUESTIONS


 

Investors hear constant coverage of the commodity markets on financial TV channels such as: Bloomberg, and CNBC, and read about the secular bull market in the commodities market in the financial press such as: Barron's and the Wall Street Journal. However, most investors have no idea about how to trade the commodity markets using futures and options.

Below, we will attempt to answer some of the frequently asked questions by investors who are interested in getting involved in the commodity markets.  

1. What are commodity options?

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

3. How large is my profit potential when I buy a commodity option?

4. Why commodity options on futures have become such an increasingly popular investment?

5. What place do commodity options have in an overall investment program?

6. How do commodity options compare with other investments involving a similar risk to reward ratio?

7. What are some basic rules and strategies for trading the commodity markets?