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1. • You can trade options on futures contracts

     • You can trade options on futures contracts much like you trade options on other securities, by buying or writing call or put options depending on the direction you believe the underlying product will move. Buying options provides a way to profit from the movement of futures contracts, but at a fraction of the cost of buying the actual future.
     www.investopedia.com/articles/active-trading/052214/trading-options-futures-contracts.asp

     Trading Options on Futures Contracts - Investopedia

2. People also ask

   What is the difference between options and futures?

   • Futures contracts require a margin, while options contracts cannot be traded on margin. Contracts to buy or sell the S&P 500 index at a future date at a predetermined price. Contracts that give the right, but not the obligation, to buy or sell E-mini S&P 500 futures at a set price before the contract expires.

   Trading Options on S&P 500 Futures - Investopedia

   www.investopedia.com/trading/introduction-options-futures/

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   What do you need to know about futures options?

   • You need a detailed understanding of each futures option contract you are going to trade, learn what drives futures and options prices, and learn how to decide which futures options contracts to buy and sell. Experienced futures options traders always have a plan before entering a trade.

   What You Need to Know About Trading Futures Options

   www.tradestation.com/learn/market-basics/futures-options/the-basics/what-you-need-to-know-about-trading-futures-options/

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   How does futures options trading work?

   • This plan includes how many contracts to buy or sell, how much risk they are willing to take, how much money they are willing to lose on a single trade and at which price level to take profits. Understanding how futures options trading works is a key factor to consistent trading and avoiding mistakes.

   What You Need to Know About Trading Futures Options

   www.tradestation.com/learn/market-basics/futures-options/the-basics/what-you-need-to-know-about-trading-futures-options/

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   What is an option on a futures contract?

   • An option on a futures contract is very similar to a stock option in that it gives the buyer the right, but not obligation, to buy or sell the underlying asset, while creating a potential obligation for the seller of the option to buy or sell the underlying asset if the buyer so desires by exercising that option.

   Options On Futures: Definition, How They Work, and Example - Investo…

   www.investopedia.com/terms/o/options-on-futures.asp

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   What should a futures options trader know before entering a trade?

   • Experienced futures options traders always have a plan before entering a trade. This plan includes how many contracts to buy or sell, how much risk they are willing to take, how much money they are willing to lose on a single trade and at which price level to take profits.

   What You Need to Know About Trading Futures Options

   www.tradestation.com/learn/market-basics/futures-options/the-basics/what-you-need-to-know-about-trading-futures-options/

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   How do you trade options?

   • You trade options depending on how you expect the value of the underlying future, called the underlying, to move. You buy a call if you expect the value of a future to increase; you buy a put if you expect the value of a future to fall. The cost of buying the option is the premium. Many futures contracts have options attached to them.

   Trading Options on Futures Contracts - Investopedia

   www.investopedia.com/articles/active-trading/052214/trading-options-futures-contracts.asp

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3. www.investopedia.com › terms › oOptions On Futures: Definition, How They Work, and Example

   www.investopedia.com › terms › o

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   Jun 18, 2022 · An option on futures gives the holder the right, but not the obligation, to buy or sell a futures contract at a specific price, on or before its expiration.

4. www.investopedia.com › articles › active-tradingTrading Options on Futures Contracts - Investopedia

   www.investopedia.com › articles › active-trading

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   Dec 21, 2023 · You might want to trade options on a futures contract for several different reasons, depending on your goals: To hedge risk; To speculate on direction; To create a spread position

5. Videos

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6. www.investopedia.com › trading › introductionTrading Options on S&P 500 Futures - Investopedia

   www.investopedia.com › trading › introduction

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   Feb 28, 2024 · An option on an S&P 500 futures contract gives a trader the right, but not the obligation, to buy or sell the underlying futures contract at a certain price by an expiration date.

   • Author: John Summa

7. www.cmegroup.com › education › whitepapersFundamentals of Options on Futures - CME Group

   www.cmegroup.com › education › whitepapers

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   Options on futures are contracts that represent the right, not the obligation, to either buy (go long) or sell (go short) a particular underlying futures contract at a specified price on or before a specified date, the expiration date.

8. www.tradestation.com › learn › market-basicsWhat You Need to Know About Trading Futures Options ...

   www.tradestation.com › learn › market-basics

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   May 15, 2020 · You need a detailed understanding of each futures option contract you are going to trade, learn what drives futures and options prices, and learn how to decide which futures options contracts to buy and sell.

9. www.cmegroup.com › markets › optionsOptions on futures - CME Group

   www.cmegroup.com › markets › options

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   Trade a slice of our liquid options with smaller-sized contracts. Scale exposure up or down with more precision and less upfront financial commitment.

10. thetradinganalyst.com › options-on-futuresOptions on Futures Explained - The Trading Analyst

    thetradinganalyst.com › options-on-futures

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    Options on futures are derivatives that give the buyer the right—but not the obligation—to buy or sell a futures contract at an agreed-upon price before a set date. This flexibility makes options an appealing tool for custom strategies, fitting various market forecasts and risk management plans.