Danny asked:


When selling a futures contract, is the process like selling an options contract? For example, when selling a futures contract, is the seller also the writer? Or are there no writer since in the exchange, everything is standardized?
So if that’s the case, can I just decide to sell any amount of contracts as I please? And as a buyer, are there premiums that must be paid? Are Futures like…more intense/volatile versions of Options (a stretch)?

I know that unlike options and stocks, the settlement is at the end of each day, so therefore, you realize your losses and gains daily, but does that mean that your “account” is debited and credited with the dollars lost and gained?

For options, there are no losses in writing a contract, so is that the same for futures? If I sell a futures contract, and no one bites, does nothing happen?

I think I have a decent understanding of Futures, as a derivative, but the logistics in trading seems considerably less straight forward than Options trading. Also, what’s the difference between the exchange and the clearinghouse? One is the platform to trade on, sort of like Ebay, while the other is…to protect the traders,…so (a stretch) but SOORRTT of like Paypal (more so for the seller)?? But then do they work together outside of the traders knowledge? As in, do I buy futures from the exchange? or from the clearinghouse? Or is the clearinghouse within the exchange?

Thanks everyone in advance. This is for a futures class, and the concept is so foreign. Thanks again!!
One more thing! I understand this is all REALLY mostly risk trading, and the commodities dealt with are rarely..dealt with. But, at the end of the day, where do the commodities go? For example, a futures option on corn that’s due to expire a year from now. I buy it…sell it, someone buys it…sells it, and as it gets closer to the exp date, for the farmer who put it on the market in the first place (or…do they do that?) what does HE do with the commodity? Or if not the farmer, for WHOever has the ACTUAL commodity, what happens to the it?

edcyhn asked:


You get more bang for your buck with options. More reward, less risk with options.

I need to learn more about options, but for now it seems the way to go. Why put a lot of money into stocks, when you could use options instead?

x asked:


is there a bigger risk to trading options than just stocks?

forextrade1970 asked:


Hello. I want to trade options only long calls and long puts instead of trading just stocks. The problem is that when i trade in the money contracts for the next month for example the expected profit is lower than the risked money. Is there a solution to this problem? I mean i want to risk as little as i can and my profit to be higher than the risked money.

Thanks

jazzyguy17 asked:


I just started investing in stocks this year and am finding the maze of details and information about investing methods overwhelming. I’m also sensing that those who make careers of this are in a much better position to know how to trade, whether using options, calls, puts, etc. I signed up for a number of newsletters from professionals who then try to sell me their services, claiming they have inside information that can make a lot of money. They charge anywhere from $100 to $6,000. for their “inside information”, and while I’m sure they know much more than I do I’m wondering what the rewards vs. risk is if I decide to use their recommendations.

jazzyguy17 asked:


I just started investing in stocks this year and am finding the maze of details and information about investing methods overwhelming. I’m also sensing that those who make careers of this are in a much better position to know how to trade, whether using options, calls, puts, etc. I signed up for a number of newsletters from professionals who then try to sell me their services, claiming they have inside information that can make a lot of money. They charge anywhere from $100 to $6,000. for their “inside information”, and while I’m sure they know much more than I do I’m wondering what the rewards vs. risk is if I decide to use their recommendations.