Trade options on futures

Learn how to trade futures and explore the futures market. Discover potential trading in one of the world’s most active markets. Learning how to trade futures could be a profit center for traders and speculators, as well as a way to hedge your portfolio or minimize losses. Like any speculative market, it&rsquos not right for everyone, especially the risk-adverse. But, for those who seek a fast-moving trading opportunity, futures trading may be right for you. Explore the information and resources below to increase your understanding of how to start trading futures. If you have questions along the way, contact one of our futures specialists available anytime via chat, by phone 866-839-1100 or by email 247. Understanding the Basics. A futures contract is quite literally how it sounds. It&rsquos a financial instrument-also known as a derivative-that is a contract between two parties that agree to transact a security or commodity at a fixed price at a set date in the future. It is a contract for a future transaction, which we know simply as &ldquofutures.&rdquo The vast majority of futures do not actually result in the delivery of the underlying security or commodity. Most futures transactions are purely speculative, so it&rsquos an opportunity to profit or hedge risks, and not usually used to take delivery of the physical good or security for most traders. There are many types of futures contract to trade.

They include: The futures market is centralized, meaning that it trades in a physical location or exchange. There are several exchanges, such as The Chicago Board of Trade and the Mercantile Exchange. Traders on futures exchange floors trade in &ldquopits,&rdquo which are enclosed places designated for each futures contract. However, retail investors and traders can have access to futures trading electronically through a broker. Some things to consider before trading futures: Leverage : Control a large investment with a relatively small amount of money. This allows for strong potential returns, but you should be aware that it can also result in significant losses. Diversification: Access a wide array of investments including oil and energy, gold and other metals, interest rates, indexes, grains, livestock, and more. After Hours Market: Futures markets trade at many different times of the day. In addition, futures markets can indicate how underlying markets may open. For example, stock index futures will likely tell traders whether the stock market may open up or down.

Liquidity: The futures market is very active with a large amount of trading, especially in the high volume contracts. This makes it&rsquos easier to get in and out of trades. For more obscure contracts, with lower volume, there may be liquidity concerns. Hedging: If you have an existing position in a commodity or stock, you can use a future contract to protect unrealized profit or minimize a loss. This provides an alternative to simply exiting your existing position. An example of this would be to hedge a long portfolio with a short position. To start trading futures at TD Ameritrade, you&rsquoll need to open a standard account. The standard account can either be an individual or joint account. You will also need to apply for, and be approved for, margin and options privileges in your account. Choosing a Trading Platform. With a TD Ameritrade account, you&rsquoll have access to thinkorswim, a powerful trading platform for futures trading, as well as other investments.

This feature-packed trading platform lets you monitor the futures markets, plan your method, and implement it in one convenient, easy-to-use, and integrated place. One of the unique features of thinkorswim is custom futures pairing. Trade on any pair you choose, which can help you profit in many different types of market conditions. In addition, TD Ameritrade has mobile trading technology, allowing you to not only monitor and manage your futures positions, but trade contracts right from your smartphone, mobile device, or iPad. Developing a Trading method. For any futures trader, developing and sticking to a method is crucial. Traders tend to build a method based on either technical or fundamental analysis. Technical analysis is focused on statistics generated by market activity, such as past prices, volume, and many other variables. Charting and other similar technologies are used. Fundamental analysis focuses on measuring an investment&rsquos value based on economic, financial, and Federal Reserve data.

Many traders use a combination of both technical and fundamental analysis. For those traders focused on technical analysis, it&rsquos a dual-layer proposition, meaning you&rsquoll need to look at the technical data for both the actual security or commodity, and the associated futures contract. The good news is that TD Ameritrade&rsquos thinkorswim, trading platform has a high level of technical analysis tools for futures trading, helping you make the correlation. You&rsquoll also find plenty of third-party fundamental research and commentary, as well as many idea generation tools. You can also use paperMoney® to practice your trading method without risking capital. In addition, explore a variety of tools to help you formulate a futures trading method that works for you. Building Your Skills. Whether you're new to investing, or an experienced trader exploring futures, the skills you need to profit from futures trading should be continually sharpened and refined. You&rsquoll find thinkorswim, has a nearly endless amount of features and capabilities that will help build your knowledge and futures trading skills. You can also contact a TD Ameritrade futures specialist anytime via chat, by phone 866-839-1100 or by email 247. Explore our educational and research resources too. What Your Financial Services Firm Should Be. See what sets us apart from the rest with our top 6 reasons to choose TD Ameritrade . Compare TD Ameritrade to other leading financial services firms. Best for Long-Term Investing.

For five years in a row, we ranked #1 for Long-Term Investing in Barron's 2017 Online Broker Survey. Check the background of TD Ameritrade on FINRA's BrokerCheck. Trade commission-free for 60 days plus get up to $600* Offer Details. #1 for Long-Term Investing. Market volatility, volume and system availability may delay account access and trade executions. Educational resources are provided for general information purposes only and should not be considered an individualized recommendation or advice. Diversification does not eliminate the risk of experiencing investment losses. Futures and futures options trading is speculative and is not suitable for all investors. Please read the Risk Disclosure for Futures and Options prior to trading futures products. Futures accounts are not protected by the Securities Investor Protection Corporation (SIPC). Futures and futures options trading services provided by TD Ameritrade Futures & Forex LLC. Trading privileges subject to review and approval.

Not all clients will qualify. Forex accounts are not available to residents of Ohio or Arizona. International investments involve special risks, including currency fluctuations and political and economic instability. TD Ameritrade, Inc., member FINRA SIPC. This is not an offer or solicitation in any jurisdiction where we are not authorized to do business. TD Ameritrade is a trademark jointly owned by TD Ameritrade IP Company, Inc. and The Toronto-Dominion Bank. © 2017 TD Ameritrade. Trading Options on Futures Contracts. Futures contracts are available for all sorts of financial products, from equity indexes to precious metals.

Trading options based on futures means buying or writing call or put options depending on the direction you believe an underlying product will move. (For more on how to decide which call or put option to use, see "Which Vertical Option Spread Should You Use?") 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. Buy a call if you expect the value of a future to increase. Buy a put if you expect the value of a future to fall. The cost of buying the option is the premium. Traders also write options. Many futures contracts have options attached to the them. Gold options, for example, are based on the price of gold futures (called the underlying), both cleared through the Chicago Mercantile Exchange (CME) Group. Buying the future requires putting up an initial margin of $7,150--this amount is set by the CME, and varies by futures contract--which gives control of 100 ounces of gold. Buying a $2 gold option, for example, only costs $2 x 100 ounces = $200, called the premium (plus commissions). The premium and what the option controls varies by the option, but an option position almost always costs less than an equivalent futures position.

(For insight on how gold prices are set, see "The Insiders Who Fix Rates for Gold, Currencies, and Libor") Buy a call option if you believe the price of the underlying will increase. If the underlying increases in price before the option expires, the value of your option will rise. If the value doesn't increase, you lose the premium paid for the option. Buy a put option if you believe of the underlying will decrease. If the underlying drops in value before your options expires, your option will increase in value. If the underlying doesn't drop, you lose the premium paid for the option. Option prices are also based on 'Greeks,' variables which affect the price of the option. Greeks are a set of risk measures that indicate how exposed an option is to time-value decay. Options are bought and sold before expiration to lock in a profit or reduce a loss to less than the premium paid. Writing Options for Income. When someone buys an option, someone else had to write that option.

The writer of the option, who can be anyone, receives the premium from the buyer up front (income) but is then liable to cover the gains attained by the buyer of that option. The option writer's profit is limited to the premium received, but liability is large since the buyer of the option is expecting the option to increase in value. Therefore, option writers typically own the underlying futures contracts they write options on. This hedges the potential loss of writing the option, and the writer pockets the premium. This process is called "covered call writing" and is a way for a trader to generate trading income using options, on futures she already has in her portfolio. A written option can be closed out at any time, to lock in a portion of the premium or limit a loss. Trading Options Requirements. To trade options you need a margin approved brokerage account with access to options and futures trading. Options on futures quotes are available from the CME (CME) and the Chicago Board Options Exchange (CBOE), where options and futures trade. You can also find quotes in the trading platform provided by options brokers. Buying options on futures may have certain advantages over buying regular futures.

The option writer receives the premium upfront but is liable for the buyers gains because of this, option writers usually own the own the underlying futures contract to hedge this risk. To buy or write options requires a margin approved brokerage account with access to CME andor CBOE products. Options On Futures: A World Of Potential Profit. If you've ever studied a second language, you know how hard it can be. But once you learn, say, Spanish as a second language - learning Italian as a third would be much easier since both have common Latin roots. To get facility with Italian as a third language, you would need only to grasp minor changes in word forms and syntax. Well, the same could be said for learning options. (To learn the basics, read our Options Basics Tutorial .) For most people, learning about stock options is like learning to speak a new language, which requires wrestling with totally unfamiliar terms. But if you already have some experience with stock options, understanding the language of options on futures becomes easy. In fact, basic concepts such as delta, time value and strike price apply the same way to futures options as to stock options, except for slight variations in product specifications, essentially the only hurdle to get passed. In this article, we provide an introduction to the world of S&P 500 futures options that will reveal to you how easy it is to make the transition to options on futures (also known as commodity or futures options), where a world of potential profit awaits. Stock Index Options on Futures. When learning futures options, on the other hand, traders new to any particular market (bonds, gold, soybeans, coffee or the S&Ps) need to get familiar not only with the option specifications but also with the product specifications of the underlying futures contract.

These, however, are insignificant obstacles in today's online environment, which offers so much information just a click away. This article will hopefully interest you in exploring these exciting markets and new trading opportunities. (For more background knowledge, read Understanding Option Pricing .) To illustrate how options on futures work, I will explain the basic characteristics of S&P 500 options on futures, which are the more popular in the world of futures options. Although these are cash-based futures options (i. e. they automatically settle in cash at expiration), the logic of S&P futures options, like all futures options, is the same as that of stock options. S&P 500 futures options, however, offer unique advantages for example, they can allow you to trade with superior margin rules (known as SPAN margin), which allow more efficient use of your trading capital. Perhaps the easiest way to begin getting a feel for options on futures is simply to look at a quotes table of the prices of S&P 500 futures and the prices of the corresponding options on futures. Essentially, the principle of the pricing of S&P futures is the same as that of the price behavior of any stock. You want to buy low and sell high. In other words, if the S&P futures rise, the value of the contract rises and vice versa if the price of S&P futures fall. Important Differences and Characteristics.

There is, however, a key difference between futures and stock options. A $1 change in a stock option is equivalent to $1 (per share), which is uniform for all stocks. With S&P futures, a $1 change in price is worth $250 (per contract), and this is not uniform for all futures and futures options markets. While there are other issues to get familiar with - such as the fair value of S&P futures and the premium on the futures contract - these related concepts are insignificant in practice and for what you need to understand for most option strategies. Aside from the distinction of price specification, there are some other important characteristics of S&P options that are important. Since these options trade on the underlying futures, the level of S&P futures, not the S&P 500 stock index, is the key factor affecting prices of options on S&P futures. Volatility and time-value decay also play their part, just like they affect a stock option. Let's take a closer look at S&P futures and option prices, particularly at how changes in the price of futures affect changes in the prices of the option. First let's look at S&P futures product specifications, which are presented in Figure 1. S&P futures trade in "dime-sized" ticks (the minimum price change intervals), worth $25 each, so a full point ($1) is equal to $250. The active month is known as the "front-month contract", and it is the first of the three delivery months listed in Figure 2. The last trading day for all S&P futures contracts is on the Thursday before expiration, which is on the third Friday of the contract month. By looking at Figure 2 below, we can see some actual prices for the S&P 500 futures, taken from the close of daily trading (pit-session) on Jun 12, 2002.

The Jun S&P futures contract in Figure 2, for example, settled at 1020.20 on this particular day. The point change of +6.00 is equivalent to a gain of $1,500 per single contract (6 x $250 = $1,500). It is worth noting that the S&P futures and the S&P 500 stock index will trade nearly identically, but the S&P futures will trade with a slight premium attached. Understanding S&P Futures Options. Now let's turn to some of the corresponding options. Like for nearly all options on futures, there is a uniformity of pricing between the futures and options. That is, the value of a $1 change in premium is the same as a $1 change in the futures price. This makes things easy. In the case of S&P 500 futures options and their underlying futures, a $1 change is worth $250. To provide some real examples of this principle, I have selected in Figure 3 the 25-point interval strike prices of some out-of-the-money puts and calls trading on the Jun S&P futures. Just as we would expect for stock put and call options, the delta in our examples below is positive for calls and negative for puts. Therefore, since the Jun S&P futures rose by six points (at $250 per point, or dollar), the puts fell in value and the calls rose in value. The strikes farthest from the money (925 put and 1100 call) will have the lower delta values, and those nearest the money (1000 put and 1025 call) have higher delta values.

Both the sign and the size of the change in dollar value for each option make this clear. The higher the delta value the greater the option price change will be affected by a change of the underlying S&P futures. For example, we know that the Jun S&P futures rose six points to settle at 1020.20. This settlement price is just shy of the Jun call strike price of 1025, which increased in value by $425. This near-the-money option has a higher delta (delta = 0.40) than options farther from the money, such as the call option with a strike price of 1100 (delta = 0.02), which increased in value by only $12.50. Delta values measure the impact further changes in the underlying S&P futures will have on these option prices. If, for instance, the underlying Jun S&P futures were to rise 10 more points (provided there is no change in time-value decay and volatility), the S&P call option in figure 3 with a strike price of 1025 would rise by four points, or gain $1,000. The same but reverse logic applies to the S&P put options in Figure 3. Here we see the put option prices declining with a rise in the Jun S&P futures. The nearest-the-money option has a strike price of 1000, and its price fell by $600. Meanwhile, the farther-from-the-money put options, such as the option with a strike price of 925 and delta of -0.04, lost less, a value of $225. As for other options on futures markets, you'll need to get familiar with their product specifications - such as trading units and tick sizes - before doing any trading. Having said that, however, I am sure you will find that becoming fluent in a second options language is not as difficult as you might initially have thought. Options & Futures. Managing options risk with the Dime Buyback Program.

It cannot be emphasized enough how important it is to analyze the balance between risk and. Protective Puts: A Hedging method. For stock traders and investors who want to protect their stocks against negative moves in the. Stock Replacement Calls: A Speculation method. For stock traders and investors who want to protect their stocks against negative moves in the. Covered Calls: An Income Generation method. For stock traders who want to generate income while bidding for stock below the current market. Cash-secured Puts: An Income Generation method. For stock traders who want to generate income while bidding for stock below the current market. Using Options to Buy Stock at a Lower Price: Cash-Secured Puts. Do you use good-til-canceled (GTC) limit orders to bid for stock below the current market? Many. Using Options to Speculate: Stock Replacement Calls. Options are powerful tools that can be used by investors in different ways, and there is a. Using Options to Sell Stock at a Higher Price: Covered Calls.

When you buy a stock, do you have an exit method? Do you have a target price at which you will. Intro to Bull Put Spreads. Learn when to use bull and bear spreads and why these strategies may be less risky than buying. Often misunderstood as a risky method, selling puts can be a strategic way to buy stock. This. Often described as a better way to implement a bearish opinion, OIC instructor Dan Passarelli. Option Trading on E*TRADE Pro. E*TRADE Pro is our premium platform for option traders, with streaming real-time data, price. Perhaps the most widely used options method for options investors, OIC2 instructor Dan. Three Common Mistakes Options Traders Make. When you trade and invest with options, it's good to know about the common mistakes made by. Benefits and Risks - Options Investing. Most strategies that options investors use have limited risk but also limited profit potential. My First Options Trade.

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One of the most important monthly economic data points in a traderЂ™s diary is the release of. Understanding the Oil Data Report. There is no underestimating the importance of oil prices on the underlying health of the. The Benefits of Portfolio Diversification. One of the most important characteristics of any investment portfolio is its diversity. The Benefits of Open Access to Futures. If you are only an equity trader, when a market is closed and an opportunity arises, you cannot. Margin: Know WhatЂ™s Needed. Securities margin is the money you borrow as a partial down payment, up to 50% of the purchase. Understanding the FOMC Report. The Federal Reserve, also referred to as the Fed, is the central banking system of the United. Understanding Futures Expiration & Contract Roll. Futures contracts have a limited lifespan that will influence the outcome of your trades and. Introduction to Precious Metals. Since the dawn of time, society has sought after and prized precious metals such as gold and.

One of the defining features of the futures markets is daily mark-to-market (MTM) prices on all. About Contract Notional Value. The contract unit is a standardized size unique to each futures contract and can be based on. Tick Movements: Understanding How They Work. All futures contracts have a minimum price fluctuation also known as a tick. Tick sizes are set. Get to Know Futures Expiration and Settlement. All futures contracts have a specified date on which they expire. Prior to the expiration date. An index is a group of securities reflecting a securities market or a particular segment of a. Definition of a Futures Contract. Forward and futures contracts are financial instruments that allow market participants to offset. Learn About Futures Contract Specifications. Every futures contract has an underlying asset, the quantity of the asset, delivery location. Skill level. Topics.

Service  Connect with us. Check the background of E*TRADE Securities LLC on FINRA's BrokerCheck. PLEASE READ THE IMPORTANT DISCLOSURES BELOW. Securities products and services offered by E*TRADE Securities LLC, Member FINRA SIPC . Investment advisory services are offered through E*TRADE Capital Management, LLC, a Registered Investment Advisor. Commodity futures and options on futures products and services offered by E*TRADE Futures LLC, Member NFA . Banking products and services are offered by E*TRADE Bank, a federal savings bank, Member FDIC , or its subsidiaries. E*TRADE Securities LLC, E*TRADE Capital Management LLC, E*TRADE Futures LLC, and E*TRADE Bank are separate but affiliated companies. System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors. ©2017 E*TRADE Financial Corporation. All rights reserved. E*TRADE Copyright Policy. Futures Options Trading. Futures Options Trading 101 is available free to help both experienced and beginning futures market traders.

You may also register free to receive our special advanced options trading info: 'Options on Futures'. Futures Options Trading First Steps: 100% of Futures Options lose all their 'time value'. When Futures Options expire, they are worthless. Most of the time, Futures Markets have no trend. Cannon Trading respects your privacy, all transactions are safe and secure with High-grade Encryption (AES-256, 256-bit keys) . We do not sell your information to third parties. 1. Bullish Market Strategies. 2. Bearish Market Strategies. 3. Neutral Market Strategies. Futures Options Writing. Have you ever wondered who sells the futures options that most people buy? These people are known as the option writerssellers.

Their sole objective is to collect the premium paid by the option buyer. Option writing can also be used for hedging purposes and reducing risk. An option writer has the exact opposite to gain as the option buyer. The writer has unlimited risk and a limited profit potential, which is the premium of the option minus commissions. When writing naked futures options your risk is unlimited, without the use of stops. This is why we recommend exiting positions once a market trades through an area you perceived as strong support or resistance. So why would anyone want to write an option? Here are a few reasons: Most futures options expire worthless and out of the money. Therefore, the option writer is collecting the premium the option buyer paid. There are three ways to win as an option writer. A market can go in the direction you thought, it can trade sideways and in a channel, or it can even go slowly against you but not through your strike price. The advantage is time decay.

The writer believes the futures contract will not reach a certain strike price by the expiration date of the option. This is known as naked option selling. To hedge against a futures position. For example: someone who goes long cocoa at 850 can write a 900 strike price call option with about one month of time until option expiration. This allows you to collect the premium of the call option if cocoa settles below 900, based on option expiration. It also allows you to make a profit on the actual futures contract between 851 and 900. This method also lowers your margin on the trade and should cocoa continue lower to 800, you at least collect some premium on the option you wrote. Risk lies if cocoa continues to decline because you only collect a certain amount of premium and the futures contract has unlimited risk the lower it goes. Click play to watch video on Buying Options on Futures Contracts - A Guide to Uses and Risks. Cannon Trading Company Inc. believes in writing options on futures , but advises against doing it without the advice and expertise of a knowledgeable broker or specialist. Be strict when choosing which futures options to write and don't believe in writing options on futures as your only method. Using the same method every month on a single market is bound to burn you one month, because you end up writing options on futures when you shouldn't. Cannon Trading Co. Inc. believes you should treat option writing just like futures trading.

We believe you should stay with the major trend when writing futures options, with rare exceptions. Use market pullbacks to support or resistance as opportunities to enter with the trend, by writing futures options which best fit into your objectives. Volatility is another important factor when determining which options on futures to write, it's generally better to sell over valued futures options then under valued futures options. Remember not to get caught up with only volatility, because options on futures with high volatility could always get higher. The bottom line is, pick the general market direction to become successful over the long-term. We also believe in using stops based on futures settlements, not based on the value of the option. If a market settles above or below an area you believed it shouldn't and the trend appears to have reversed based on the charts, it's probably a good time to exit your positions. We can help you understand the risks and rewards involved, as well as how to react to certain situations, i. e. ifthen trading scenarios. We can either assist your option writing style or recommend trades and strategies we believe are appropriate, using the above guidelines. Option Buying & Spreads. Most futures options expire worthless and out of the money, therefore most people lose when buying options on futures. Cannon Trading believes there is still opportunity in buying , but you must be very patient and selective. We believe buying futures options just because a market is extremely high or low, known as "fishing for options" is a big mistake.

Refer to the guidelines on our "Trading Commandments" before purchasing any futures options. Historic volatility, technical analysis, the trend and all other significant factors should all be analyzed to increase your probability of profit. All full-service accounts will receive these studies, opinions and recommendations upon request. Cannon Trading Company's "Trading Commandments" can be used as a guideline to assist you in the process and decision making of selecting the right market and futures options to purchase. A common method we implement involves the writing and buying of futures options at the same time, known as bull call or bear put spreads. Ratio and calendar spreads are also used and are recommended at times. Please do not hesitate to call for help with any of these strategies or explanations. Here are a few examples we use often: If coffee is trading at 84, we can buy 1 coffee 100 call and write 2 135 calls with the same expiration dates and 30 days of time until expiration. This would be in anticipation of coffee trending higher, but not above 135 in 30 days. We'd be collecting the same amount of premium as we're buying, so even if coffee continued lower we'd lose nothing. Our highest profit would be attained at 135 based on options on futures expiration. To determine risk we'd take the difference between 135 and 100, which is 35 points and divide it by two, because we sold two calls for every one purchased. You'd then add the 17.5 points to 135 and this would give you the approximate break-even point based on option expiration. Risk lies if coffee rises dramatically or settles over 152.50, based on expiration.

A typical calendar spread method we use often would be to write 1 option with about 25 days left until expiration and buy 1 with 60 days left. Example: If coffee was trading at 84 and we thought prices might be heading slowly higher. We can write 1 130 coffee call with less time and buy 1 coffee 130 call with more time in the anticipation that the market will trend higher, but not above the 130 strike before the first options on futures expiration. Some additional risk here lies in the difference between the two contract months. The objective is, if coffee trades higher over the next month but not above the 130 strike price, we'd collect the premium of the option we sold by letting it expire worthless. In addition, the option we purchased may also profit if coffee rises higher, but it may lose some value due to time decay if coffee doesn't rally enough. *Note: Some futures options trade based on different futures contract months and should always be considered in your trading. Don't hesitate to call for help with any of these strategies or explanations. Remember, the key is still going to be picking the general market direction correct. Therefore, you must analyze and study each market situation with several different trading scenarios and determine which one best suits your risk parameters.

The art of trading these strategies is deciding when, where, which futures markets, and what ranges to use. If you are an inexperienced options trader use these strategies through the broker assisted program. For more information, check out our Online Trading Futures Market Glossary. The material contained in 'Futures Options Trading 101' is of opinion only and does not guarantee any profit. These are risky markets and only risk capital should be used. Past results are not necessarily indicative of future results. Consult with a Cannon Commodity Trading Executive. Services Why Cannon Trading? Self-Directed Online Traders Broker-Assisted Traders Futures Trading Systems Managed Accounts & Algo Trading International Traders Foreign Introducing Brokers Software E-Futures International TransAct AT CQG Trader Trade Navigator MetaTrader 4 FireTip (Mac Compatible) MultiCharts OptionVue iBroker Tools Support & Resistance Levels Intraday Trading Signals Live S&P Pit Audio Premium Charts Daily Research Contract Specifications Order Types Community Weekly Newsletter FAQ Exchanges Company About Contact Wiring Instructions Careers President's Letter. RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition. Futures.

Powerful tools, specialized service, and great value. Integrated mobile and web futures trading Trade futures listed on CME, ICE US, and CFE Now availableЂ”XBT-Cboe Bitcoin Futures Support from licensed Futures Specialists. price per contract, 2 on futures and options on futures, except for bitcoin futures. hour access to markets 3. Trade some of the most liquid contracts, in some of the world's largest markets. Diversify into metals, energies, interest rates, or currencies. Near around-the-clock trading. Trade 24 hours a day, six days a week 3. No pattern day trading rules. No minimum account value to trade multiple times per day. No short sale restrictions or hard-to-borrow availability concerns. Capital efficiencies. Control a large amount of notional value with relatively small amount of capital. Pro-level tools, online or on the go. You can now trade on your desktop or mobile device anytime during the 246 futures trading sessions with OptionsHouse and OptionsHouse mobile app.

Trade futures alongside equities, ETFs, and options on the same platform without moving funds between accounts View real-time contract prices and market depth in ladders, then trade, cancel, or modify orders with a click Formulate trading strategies with 100+ technical studies and full suite of drawing tools. Feel the pulse of the markets. E*TRADE Futures Research Center is powered by the CME GroupЂ”one of the worldЂ™s largest futures exchanges. Learn why many sophisticated traders rely on futures, including portfolio diversification, liquidity, leverage, and more See whatЂ™s hot with a streaming real-time quotes heatmap Get insights from seasoned professionals on indexes, energies, metals, FX, and interest rates. Contract specifications. Intraday margining is set to 50% of initial margin requirements, except Bitcoin futures. 4. Last updated: 12192017. Trading XBT-Cboe Bitcoin Futures requires signing the CFE market data agreement Your futures account must be prefunded to trade bitcoin futures Sweep functionality and global buying power is disabled between futures and brokerage accounts To begin activation, please contact our Futures Specialists at (877) 553-8887. These products involve a high level of risk and may not be suitable for all investors. You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. Please visit NFA and CFTC for additional information regarding the risks relating to these products.

. Call us at 877-553-8887. Learn how to take on the global markets with futures. Virtually 24 Hour Access. Trade 24 hours a day, six days a week. This video shows you how. The Benefits of Portfolio Diversification. One of the most important characteristics of any investment portfolio is its diversity. Control a large contract value with a small amount of capital. We show you how in this video. Frequently asked questions.  What are the requirements to open a futures account? To trade futures, you must open (or already have) a Margin brokerage account.  Why do I need a margin brokerage account to trade futures?

E*TRADE takes the protection of your assets very seriously. In order to ensure we are providing our customers with available financial safeguards, the Firm will only keep assets in the Futures account that are needed to satisfy the margin requirement of an existing futures position. Funds not required for futures margin will be automatically moved back to your linked margin brokerage account where they are given SIPC protection or FDIC insurance.  How does funding an Automated Money Movement work in my futures account? If your linked margin brokerage account already has sufficient funds, there is no need to make additional transfers to separately fund futures trading. The minimum margin requirement for futures positions held overnight will be automatically transferred to your E*TRADE futures account, including commission and fees, and any deficiency funds required to satisfy margin calls. Conversely, any excess margin and available cash will be automatically transferred back to your margin brokerage account where SIPC protection is available. Please note: The above applies only to linked margin brokerage accounts at E*TRADE. For unlinked E*TRADE accounts, there is no automatic transfer of minimum margin requirements or deficiency funding. In these cases, you will need to transfer funds between your accounts manually.  Are there any fees to receive live quotes for futures? E*TRADE currently absorbs all CME Group quote fees for clients.

ICE U. S. and CFE are passed through to clients. Service  Connect with us. Check the background of E*TRADE Securities LLC on FINRA's BrokerCheck. PLEASE READ THE IMPORTANT DISCLOSURES BELOW. Securities products and services offered by E*TRADE Securities LLC, Member FINRA SIPC . Investment advisory services are offered through E*TRADE Capital Management, LLC, a Registered Investment Advisor. Commodity futures and options on futures products and services offered by E*TRADE Futures LLC, Member NFA . Banking products and services are offered by E*TRADE Bank, a federal savings bank, Member FDIC , or its subsidiaries. E*TRADE Securities LLC, E*TRADE Capital Management LLC, E*TRADE Futures LLC, and E*TRADE Bank are separate but affiliated companies. System response and account access times may vary due to a variety of factors, including trading volumes, market conditions, system performance, and other factors. ©2017 E*TRADE Financial Corporation. All rights reserved. E*TRADE Copyright Policy. Options on Futures.

Note: Volume and Open Interest data is from the previous trade date. Preliminary data updates at approximately 9:00 p. m. CT and the final update is at 10:00 a. m. CT next business day. Note: Volume and Open Interest data is from the previous trade date. Preliminary data updates at approximately 9:00 p. m. CT and the final update is at 10:00 a. m. CT next business day. Note: Volume and Open Interest data is from the previous trade date. Preliminary data updates at approximately 9:00 p. m. CT and the final update is at 10:00 a. m. CT next business day. Note: Volume and Open Interest data is from the previous trade date. Preliminary data updates at approximately 9:00 p. m. CT and the final update is at 10:00 a. m. CT next business day. Note: Volume and Open Interest data is from the previous trade date. Preliminary data updates at approximately 9:00 p. m. CT and the final update is at 10:00 a. m. CT next business day. QuikStrike Analytics. 2017 Expiration Calendars.

Stay Informed. Monthly Options Review. Follow CME Group Options. Subscribe to Updates. Begin Course. Discover how options on futures can help you mitigate downside risk and diversify your portfolio. Get acquainted with the basic fundamentals, method and vocabulary of our options markets, providing a solid base of knowledge that will prepare you to tackle these opportunities. Product Applications. What's Happening in the Options Markets? Agricultural Options. Equity Index Options. Interest Rate Options. About Options. At CME Group, enjoy options trading across all the major asset classes on one global marketplace.

Benefit from the deep liquidity of our benchmark options on futures across Interest Rates, Equity Index, Energy, Agriculture, Foreign Exchange and Metals, giving you the flexibility and market depth you need to manage risk and achieve your trading objectives. And, by trading options where you trade the underlying futures hedge, you can maximize capital efficiency through margin offsets and streamlined operations. Send Us Feedback. CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX. Futures Markets - Part 11: Options on Futures. Futures Trading Short Course. Options on futures began trading in 1983. Today, puts and calls on agricultural, metal, and financial (foreign currency, interest-rate and stock index) futures are traded by open outcry in designated pits. These options pits are usually located near those where the underlying futures trade. Many of the features that apply to stock options apply to futures options. An option's price, its premium, tracks the price of its underlying futures contract which, in turn, tracks the price of the underlying cash.

Therefore, the March T-bond option premium tracks the March T-bond futures price. The December S&P 500 index option follows the December S&P 500 index futures. The May soybean option tracks the May soybean futures contract. Because option prices track futures prices, speculators can use them to take advantage of price changes in the underlying commodity, and hedgers can protect their cash positions with them. Speculators can take outright positions in options. Options can also be used in hedging strategies with futures and cash positions. Futures options have some unique features and a set of jargon all their own. Puts, Calls, Strikes, etc. Futures offer the trader two basic choices - buying or selling a contract. Options offer four choices - buying or writing (selling) a call or put. Whereas the futures buyer and seller both assume obligations, the option writer sells certain rights to the option buyer. A call grants the buyer the right to buy the underlying futures contract at a fixed price the strike price. A put grants the buyer the right to sell the underlying futures contract at a particular strike price. The call and put writers grant the buyers these rights in return for premium payments which they receive up front.

The buyer of a call is bullish on the underlying futures the buyer of a put is bearish. The call writer (the term used for the seller of options) feels the underlying futures' price will stay the same or fall the put writer thinks it will stay the same or rise. Both puts and calls have finite lives and expire prior to the underlying futures contract. The price of the option, its premium, represents a small percentage of the underlying value of the futures contract. In a moment, we look at what determines premium values. For now, keep in mind that an option's premium moves along with the price of the underlying futures. This movement is the source of profits and losses for option traders. The buyer of an option can profit greatly if his view is correct and the market continues to rise or fall in the direction he expected. If he is wrong, he cannot lose any more money than the premium he paid up front to the option writer. Most buyers never exercise their option positions, but liquidate them instead. First of all, they may not want to be in the futures market, since they risk losing a few points before reversing their futures position or putting on a spread. Second, It is often more profitable to reverse an option that still has some time before expiration. An option's price, its premium, depends on three things: (1) the relationship and distance between the futures price and the strike price (2) the time to maturity of the option and (3) the volatility of the underlying futures contract. Puts are more or less the mirror image of calls.

The put buyer expects the price to go down. Therefore, he pays a premium in the hope that the futures price will drop. If it does, he has two choices: (1) He can close out his long put position at a profit since it will be more valuable or (2) he can exercise and obtain a profitable short position in the futures contract since the strike price will be higher than the prevailing futures price. Options On Futures. Educational materials provided to assist intermediate traders improve their commodities trading. Use the navigation panel to the right to jump ahead to a particular section. If you have any questions after reading this commodities trading educational material, or about anything included in here, don't hesitate to call us at (800) 454-9572 U. S. or (310) 859-9572 International. Buying Options on Futures Contracts. "Buying Options on Futures Contracts" is a 27-page futures trading report put out by the National Futures Association as a guide to the uses and risks of options trading as it is used in commodities trading. Futures options are a relatively recent choice as an investment opportunity, after their success in a pilot program in 1982 they have grown to widespread use on agricultural and financial futures trading. Options on futures options allow for a wide range of investment opportunities, but are still a speculative investment and thus investors should be aware of the risk of loss involved.

Some of the most common contracts investors trade options on are listed below, though this list is by no means complete. - Mini S&P 500, S&P 500, Mini Dow Jones, Mini Nasdaq future options - U. S. 30 year bonds future options - Options on currency futures contracts: euro currency, Japanese yen - Options on metal futures contracts: gold future options, silver future options - Options on other commodities contracts: soybeans, wheat, corn, cocoa, sugar, and coffee futures options - Energies contracts: crude oil, natural gas and unleaded gasoline futures options. This futures options trading booklet produced by the NFA does a good job of introducing futures traders to options trading, starting off with the vocabulary of the market and the special meaning it may have when used in the context of options trading. In Part two it then introduces the arithmetic of options premiums, describing the factors that affect price movements as well as the relationship between options prices and futures prices. The third section then goes over the mechanics of buying and writing options, describing the basic steps and risks involved. Finally, the final section includes additional factors to take into consideration before getting involved in trading options on futures. The table of contents is reproduced below in order to give you an idea of what the future options report contains: Introduction Part One: The Vocabulary of Options Trading Part Two: The arithmetic of Options Premiums Intrinsic Value Time Value Part Three: The Mechanics of Buying and Writing Options Commission Charges Leverage The First Step: Calculate the Break-Even Price Factors Affecting the Choice of an Option After You Buy and Option: What Then? Who Writes Options and Why Risk Caution Part Four: A Pre-Investment Checklist NFA Information and Resources. Trading commodity futures and options involves substantial risk of loss. The recommendations contained are of opinion only and do not guarantee any profits.

These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results. This is not a solicitation of any order to buy or sell, but a current futures market view. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading! Education. Company. Have a Question For Us? Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.