How are expiration dates managed?.

All futures contracts have expirations dates. There are three basic approaches for managing the expiration of futures contracts:-

• Offset your position
• Wait until the contract expires, then make or take delivery
• Roll the position over from one contract month into the next.

All futures contracts have expirations dates. There are three basic approaches for managing the expiration of futures contracts:

• Offset your position

Prior to expiration, you may offset by covering (buying back) a short position or selling a long position. You do not have to wait until the expiration date to complete your trade.

Example: A trader takes a long position of 2 contracts of XYZ company (equal to 200 shares) that expire in December. To offset the position, the trader would subsequently sell 2 contracts of XYZ with the same expiration month. The trader could just as easily have taken an initial short position by selling 2 December XYZ contracts and then offsetting this position by buying 2 contracts of December XYZ.

• Wait until the contract expires, then make or take delivery

On the expiration date, holders of short positions of stock futures are required to deliver physical shares of the underlying stock, and holders of long positions take delivery of the underlying stock.

This means that buying a single stock future and holding it until expiration guarentees your ownership of the underlying stock after the expiration date. If you offset your position, this process does not apply. Consult your broker regarding its procedures and fees associated with delivery if you are considering holding a stock until expiration.

• Roll the position over from one contract month into the next

If you hold a long position in a given expiration month, you can simultaneously sell that expiration month and buy the next expiration month for an agreed-upon price differential. Thus, the position is transferred, or rolled forward, and can be held for a longer period..

What are the advantages of narrow-based indices?.

Investors can take a long or short position in a concentrated basket of stocks without incurring multiple transaction fees. Many difficult-to-execute or advanced investing strategies such as spread trading or sector rotation can be executed quickly and cost-efficiently, as narrow-based indices are also subject to a margin requirement of 20% of the cash value of the contract..

What are narrow-based indices?.

Narrow-based indices are small groups of stocks that allow an investor to take a position in a concentrated are of the equities market such as airlines, computers or semiconductor components. Each narrow-based index generally includes about five companies..,

What are the advantages of single stock futures?.

There are three significant advantages:.

• With margin requirements of 20%, single stock futures provide a highly capital efficient way to participate in equities.
• No uptick is required to establish a short position.
• Market participants initiating a short position should benefit from eliminating the costs and inefficiencies associated with the stock loan process.

Trading futures involves the risk of loss. This includes the possibility of loss greater than your initial investment. Stock futures may not be suitable for all investors. Consult your broker or financial advisor before trading..

How does the futures price track with the price of the underlying security?.

Single stock futures values are priced by the market in accordance with a theoretical pricing model based on a formula:

Most of the time, single stock futures will trade at a premium to the stock price adjusted for the broker loan rate. The premium reflects the interest earned on the capital saved by not posting the full value of the underlying stock. Since futures holders are not entitled to collect dividends, the futures price must be adjusted downward by the expected amout of dividend payments prior to expiration. In the case where a large dividend payment is expected, the futures contract may theoretically trade at a discount to the actual cash price.

A stock futures contract may not always trade at the theoretically correct price due to a number of other market factors, such as whether the underlying stock is difficult to borrow for covering short trades..

What are single stock futures?.

Single stock futures are futures contracts on individual stocks. There are currently over 80 well-known stock futures such as IBM, eBay, and Philip Morris. These futures products provide investors with a cost-effective vehicle for participating in U.S. equities markets.'

Single Stock Futures offer investors a cheaper way of investing in the equity markets and should, therefore, have considerable appeal. They represent one the most interesting developments in the field of financial derivatives. This is both because of their trading potential, which is very large, and the fact that they have only recently became legal in the US.'

With SSF, investors are now able to trade futures contracts on some of the most popular individual stocks traded on stock exchanges in the US, or on “baskets” of stocks in selected sectors. SSF include approximately 50-70 of the most popular and actively traded stocks in the U.S., such as Microsoft, Pfizer, General Electric, IBM, Citigroup, AOL Time Warner, and Johnson & Johnson, to name a few. In addition, investors can also trade Narrow Based Indices (“NBI”). NBI are small groups of stocks in a concentrated area of the equities market, such as airlines, pharmaceuticals, semiconductors, energy and automotive.'

Finotec Commodities Platform

The multi-product Finotec Trading Platform, allows you to trade a wide range of financial instruments including commodities, forex, options, stocks, CFDs and futures. Each product however comes with its own resources and tool kit. Therefore, when trading commodities, you have direct access to all the news, the graphs, trading tools and indicators you may need to inform the position you intend to take. The platform gives you access to the world’s largest commodity markets at competitive prices.'

Trading Commodities with Finotec

On the Finotec' Trading Platform, buying and selling commodities is easy. We offer the most popular commodities to trade, including gold, silver, crude oil and others, and we plan to add more in the near future . Within one click, you can buy or sell those commodities 24 hours a day and benefit from 1:20 leverage (5% margin).

Also, with Finotec, you can view real-time quotes, charts and graphs with all of the technical indicators you need to analyze trends and predict market movements. And to keep you informed and updated about the latest developments in the commodity markets, our experts provide you with weekly and daily reports which include an analysis of price movements in crude oil, gold, silver and other major commodities.

As a Finotec client, you can view real time crude oil prices online or receive them via SMS or phone. Upon buying or selling a specified commodity on the platform, you may request to be notified by SMS, phone or e-mail when its price goes up or down or when it reaches a certain level.

Reading Commodity Quotes

The price of gold and silver refers to their price per ounce and in USD. For example, when you see a price quote for gold as follows: 653.65/654.15, it means that an ounce of gold is traded for 653.65 USD (sell) and 654.15 USD (buy).

For crude oil, the price refers to its price per barrel. For example, when you see a price quote for crude oil as follows: 68.335/68.365, it means that a barrel of crude oil is traded for 68.335 USD (sell) and 68.365 USD (buy). Crude oil prices are affected mostly by geopolitical issues, as well as supply and demand conditions in gasoline.

As mentioned above, commodity trading with leverage can lead to large profits, but it may also lead to substantial loss. When buying a commodity futures contract, your risk is theoretically limited to the price of the commodity dropping to zero (a very unlikely scenario). When selling, your risk is theoretically unlimited since the price of a given commodity has no absolute ceiling. In practice, however, you can limit your loss by offsetting your position when the market is moving against you or by placing a stop-loss order.

Commodities - How It Works

When trading commodities with Finotec, you do not actually purchase or own the traded good. (Imagine if you were to buy and store gold or oil!) Thanks to financial instruments and derivatives such as futures contracts or ETFs, you speculate on the price of a given commodity.

This means that you can buy or sell the commodity and take advantage of its price variation (upward and downward) without having to actually own the goods. Finotec offers several commodities to trade via futures contracts, as well as spot silver and spot gold to trade on the spot market (under the symbols XAU and XAG). The main difference between trading the spot market and trading futures market is the timeframe of the transaction. Trading commodities futures may be used either for speculation or hedging purposes. When you are speculating via commodities futures, you are predicting the future direction of a given commodity, hoping to benefit from your prediction. You open a long position (in other words, you buy) if you believe the price of the commodity will go up, and you open a short position (or sell) if you believe it will go down.

By choosing correctly – and at Finotec, we provide you with all of the resources you need to do so – you can make money regardless of the market direction. Short selling is one of the major advantages of commodity futures trading. So, whether a region’s economy is thriving or declining, commodities trading always offers a potential for profit

One of the major appeals of commodities trading with Finotec is the Leverage options that we offer. Leverage is indeed what makes commodity trading so potentially profitable in a relatively short time-frame and limited initial capital. At Finotec, when you trade commodities via futures, you get up to 20:1 leverage. This means that to open a long position on a 500-unit crude oil futures contract with a trading rate of $92, you will only have to deposit 1/20th of the full value of the contract: 92x500/20 = $2,300.

Nowadays, all sorts of raw and primary products are traded on commodity markets including agricultural products such as corn, coffee, rice and wheat, metals such as gold, silver, and iron, fuels such as crude oil and diesel, to name just a few.

Commodities Trading

Because of their very attractive potential for return, commodities are becoming increasingly popular with financial investors. This is especially true of crude oil trading and gold trading, and their respective markets which, due to the recent rise in gold and oil prices, have created profitable investment opportunities for all types of traders.

Commodities trading with Finotec also includes silver trading. The white metal also offers very interesting opportunities since its price has been highly volatile in recent years and is thus considered one of the most volatile commodities markets tradable today.

Commodities Futures Trading News

Friday, July 17, 2009

U.S. Economy
The U.S. Census Bureau said that housing starts were at an annual rate of 582,000 in June, up 3.6% from May's pace and better than expected, but down 52% from a year ago. So far in 2009, housing starts are down 48% from a year ago. September lumber is trading lower.

Bank of America said that they earned $2.42 billion in the second quarter and Citigroup said that they earned $3 billion, both better-than-expected results that were helped by a one-time sale of assets.

Livestock
The USDA said in today's Livestock Outlook that "lower (pork) production and lower (hog) prices are expected to persist for the balance of this year." They are expecting production to be down 3% in the third quarter from a year ago and down 2% in the fourth quarter from a year ago. October hogs are steady to lower.

The USDA also said that beef production will be down 8% in 2009, but they expect a 9% increase in 2010. October cattle are steady.

Cocoa
The National Confectioners Association said that the North American cocoa grind totaled 105,123 tons in the second quarter, down 6.75% from a year ago, but better than expected. September cocoa is trading higher.

Late yesterday, officials in the Ivory Coast said that they would make an effort to spray cocoa plantations to prevent black pod disease from spreading.

Coffee
Dow Jones Newswires said that there is no significant cold in Brazil's forecast for the next seven days.

Energies
September crude oil is steady to higher, encouraged by today's positive housing starts report.

Currencies
Statistics Canada said that consumer prices were down .3% in June from a year ago, the first annual decline since November of 1994. Also, the composite index of leading indicators was down .1% in June with 4 of 10 indicators showing positive gains.

Eurostat said that construction output in the EU-27 was down 2.7% in May and down 9.6% from a year ago.

Thursday, July 16, 2009

U.S. Economy
The U.S. Labor Department said that jobless claims were down 47,000 last week to 522,000, the lowest since the first week of 2009. The big drop may have been distorted by unusual activity in the auto industry.

The Philadelphia Federal Reserve's regional index of manufacturing fell from -2.2 to -7.5 in July, weaker than expected. The December 2010 eurodollars closed up .075 at 97.90.

JPMorgan reported better-than-expected earnings today after yesterday's positive earnings report from Goldman Sachs. Tomorrow, investors will hear from Citigroup and Bank of America.

Grains and Cotton
The USDA said that, as of last week, 2008-2009 exports of:
Corn improved from -32% to -31% from a year ago.
Soybeans improved from +10% to +11% from a year ago.
Cotton remained +3% from a year ago.

The USDA also said that 2009-2010 wheat exports fell from -32% to -41% from a year ago. December wheat was down 2 cents at $5.595.

China said that it will release 500,000 tons of soybeans and 2 million tons of corn from state reserves next week. November soybeans closed down 14.5 cents at $8.90.

December corn dropped 12.25 cents to a new contract low of $3.252 with ongoing pressure from good growing weather in the Midwest.

Livestock
The USDA said that 4,700 tons of U.S. beef were exported last week, up from 4,500 tons the prior week. October cattle closed up 1.15 at 91.42, the highest close in over six months...

Becoming a OptionsInvestor.

Like me, having the desire to do what most are not willing to do is an absolute giant step you are taking for financial freedom and learning how to make money off options trading.

By investing your time reading the words I've laid out on this website is a testament to your commitment to not being average and ordinary and wanting to do something special in your life.

I can relate to where you are right now and how you feel because it was only a few short years ago that I was tenaciously searching for my answers.

I was relentless in my pursuit of becoming a options investor because I had tried so many things that just didn't work out the way I had hoped for.

Like me ... you've probably asked yourself:

Where do I start? How does options trading really work? Is spending my time and hard earned money going to pay off? Which books and programs do I study? How do I know if I have what it takes to be successful?

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With this e-book you will learn simple and easy to understand techniques on how to create wealth fast as an options trader by capitalizing on:

Step 1

Leverage

You'll learn what leverage is and how to use it to create wealth fast by becoming an options trader.

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Step 2

Protecting Your Investment

You'll learn 2 powerful ways of how to buy options with small capital and pre-determine what your risk is before you trade.

Like me, having the desire to do what most are not willing to do is an absolute giant step you are taking for financial freedom and learning how to make money off options trading.

By investing your time reading the words I've laid out on this website is a testament to your commitment to not being average and ordinary and wanting to do something special in your life.

I can relate to where you are right now and how you feel because it was only a few short years ago that I was tenaciously searching for my answers.

I was relentless in my pursuit of becoming a options investor because I had tried so many things that just didn't work out the way I had hoped for.

Like me ... you've probably asked yourself:

Where do I start? How does options trading really work? Is spending my time and hard earned money going to pay off? Which books and programs do I study? How do I know if I have what it takes to be successful?

I've laid out a simple and easy to understand plan for success on becoming an options trader that you can obtain in the next few minutes and start taking charge of your financial destiny.

Now available to you in an illustrated e-Book format:

"Beginner Options Trading"

If you want to skyrocket your income and obliterate debt from your life forever then you need to know how you can benefit from the techniques you'll learn from this e-book.

With this book you will learn everything you need to know to successfully start options trading and making huge profits from the start.

With this e-book you will learn simple and easy to understand techniques on how to create wealth fast as an options trader by capitalizing on:

Step 1

Leverage

You'll learn what leverage is and how to use it to create wealth fast by becoming an options trader.

You will learn how to create wealth 10 times faster using leverage and how you can be out of the rat race in less than 36 months.

Step 2

Protecting Your Investment

You'll learn 2 powerful ways of how to buy options with small capital and pre-determine what your risk is before you trade.

My economy is GREAT Now

My economy is GREAT!

Good news from a newbie...bought into a bearish hedge position on Monday 11/17 at $4.95. Sold this morning, 3+ days later at $7.31! It was paper money, but I'm thrilled to see that when one follows the rules, emotion is stripped away and the results can be great. Now I read the dour business news, and just smile. As T. Harv Eker likes to say, "My economy is GREAT!"

Aaron Weiner Irvine, California

I am a VERY Person Now

I'm pleased to announce that I took my first trade on the SPY this week. Monday AM I bought a strangle with an 87 Put and a 90 Call. The formula gave me a target price of about $80. I thought that was too far to expect it to swing & calculated a $1 profit with a target of $82. My sell order closed today with a profit of $85 and I am a VERY happy man!

Thank you so very, very much!

DONALD TORES S JNR., OPTION INTL LTD, CO"

Back in 2008, I was working 70-hour a week in my day job.....

Stress out and no much time being my wife and my 9 year old daughter.

At that time, I was making a 6 figure income a year with Unisys in Singapore as a Finance Director.

As with most technology company at that time, cost cutting is a very common. I still have my job but my finance team is getting smaller and smaller each year but not the work.

And then it occurred to me...

I can't possibly continue with such stressful state and I was already reaching 40.

I was tired of the long hours....

I have money but don't have the time.

Yes I also realized I only have one source of income, and if I lost my job, it was going to be very stressful for me and my family.

So I asked myself what could I do to allow me generate a second source of income within my busy schedule until such time I have more options to leave my stressful job....

You know what......

.......a friend recommended me to read a book called "Rich Dad Poor Dad" by Robert Kiyosaki, and Robert teaches about "how the poor and middle class work for money but the rich knows how money works for them and that's why the rich gets richer and the poor become poorer...."

I immediately recognize the power in that concept...

So I continue to do my research...

In one of Robert's work, he specifically mention that there are 3 types of investors...

Firstly, it is the losing investor, those who lost money whether stock prices go up or down.

Secondly, it is the average investor, those who only know how to make money when stock prices go up but lost money when stock prices come down.

Thirdly, it is the qualify investor, those who makes money regardless if the stock prices go up or down.....

Right then, I decided I want to be a qualify investor....

Learn the secret bombshell system

Learn the secret bombshell system on how to create a second source of income trading options safely and profitably , only 30 minutes a day and create at least $1000 per week!

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From the desk of SIR DONALD TORES S JNR.

Tuesday, 10:28 a.m.

Dear Options Investor,

Are you overwhelmed by all the technical mumbo-jumbo that most financial advisors throw at you? It's time to cut through the B.S. and find out the simple way to invest like a professional money manager — safely, securely, and for maximum profits.

Even if you've read all the books on options trading and spent months studying strategies and formulas, actually sitting down and creating your own options trading plan that works can turn out to be a miserably frustrating experience.

If you're like me, you've wasted a lot of your valuable time trying to find step-by-step options trading instructional strategies that are easy to use. It seems that everywhere you look all you find are books that say they have step-by-step instructions, but all they really are concepts and philosophy with a few pages of guidelines.

Since 2003, I've been helping options investors trade more profitably. I've taught at hundreds of seminars and I've been featured in Singapore Sunday Times, TODAY, Malaysia STAR, Shanghai Magazine, Borneo Times, Borneo Bulletin!

My trading philosophy is simple.......

Most options investor are overly eager to learn how to make money quickly but they missed out one major element......

You may make money but can you do this consistently and safely.....

Most people can't.

Most people can't keep their profits.

So what is really missing.....

95% of options investors conveniently forget this ......

They fail to master the skill of "how not to lose money"

I like to quote Warren Buffet who is one of world's successful investor...

Mr Buffet says Rule number 1 in investing is "Learn how not to lose money"

Rule number 2 in investing is "Never ever forget rule number 1"

Discover The Enormous Opportunity

Investors worldwide are discovering the enormous opportunities available through commodity options trading. However, because commodities have differing underlying characteristics from equities, commodity options behave differently as well. In this book, two of the field's most respected analysts present strategies built from the ground up for commodity options. Carley Garner and Paul Britain begin with a quick primer on how commodity options work, how they evolved, and why conventional options strategies often fail in the commodity options markets. Next, using detailed examples based on their own extensive research, they show how to leverage the unique characteristics of commodity options in your own trades. You'll walk through trades from "top to bottom,"
master both long- and short-option approaches, and learn powerful strategies usually ignored in options books. For example, the authors introduce synthetic swing trading strategies that systematically reduce volatility from the market.

This book's easy-to-use trading strategies are strategically employed by the author's clients every day: With Commodity Options, you can work to put the odds in your favor, too!

* Why commodity options are different-and what it means to you
Understand key differences in the underlying assets and the logistics of market execution
* Systematically rewrite the odds in your favor
Four ways to make winning trades more likely-and losing trades less common
* When to trade short options-and how to manage the risk
Why careful option selling may improve your odds of success
* Master strategies designed for diverse market conditions
Combine long and short options to create the right strategy for any market opportunity
* Exploit short-lived trends through "synthetic" swing trading
Get the advantages of futures contracts without the volatility

Commodity Options: Trading

Don't Miss out on Today's Hottest Trading Arena: Commodity Options!

"The authors have written the definitive work on trading commodity options. Their in-depth knowledge of this subject is legendary among industry professionals and expert traders alike, and their ability to relay their knowledge through text, pictures, and the spoken word is unparalleled in our industry."
--Lan Turner, CEO, Gecko Software, Inc.

"This book captures the realities of commodity option trading in a simple and easy- to-read presentation that will be beneficial for traders of all sizes and skill levels."
--Chris Jarvis, CFA, CMT, Caprock Risk Management, LLC

"Even the most experienced investors often overlook the fact that options on futures are fundamentally different from options on stocks. This book fills that gap and sets the record straight with clear and concise descriptions that are easy to understand. Guaranteed to become a true source of value creation for anyone interested in trading commodity options."
--Jeff Augen, author, The Volatility Edge in Options Trading

"Commodity Options arms readers with the strategies and tactics needed to take a more active approach to managing risk in today's turbulent markets. The authors exhaustively break down every component of a commodity option to its lowest common denominator, making this book an essential piece of information for those looking to expand their trading tool box or further build on existing option strategies."
--John Netto, Chief Investment Strategist, NetBlack Capital and author, One Shot--One Kill Trading