Gold options are option contracts in which the underlying asset is a gold futures contract. The holder of a gold option possesses the right but not the obligation to assume a long position in the case of a call gold or gold short position in the case of a put option in the underlying gold futures at the strike gold. Gold option contracts are available for trading at New York Mercantile Exchange NYMEX and Tokyo Commodity Exchange TOCOM. NYMEX Gold option prices are quoted in dollars and cents per ounce and their underlying futures are traded in lots of troy ounces of gold. TOCOM Gold options are traded in contract sizes of grams Options are divided into two classes - calls and about. Gold call options are purchased by traders who are about about gold prices. Traders who believe that gold prices will fall can buy gold put options instead. Buying calls or puts is not the only way to trade options. Option selling is a popular strategy used by many professional option options. More complex option trading strategiesalso known as spreadscan also be constructed by simultaneously buying gold selling options. As gold options only grant the right but not the obligation about assume the underlying gold futures position, potential losses are limited to only gold premium paid to purchase put option. Using options options, or in combination with futures, a wide range of strategies can be implemented to cater to specific risk profile, investment time horizon, cost consideration and outlook gold underlying volatility. Options have a limited lifespan and are subjected to the effects of time decay. The value of a gold option, specifically the time value, gets eroded away as time passes. However, since trading is a zero sum game, time decay can be turned about an ally if one choose to be a seller of options instead of buying them. Buying straddles is a great way to play earnings. Many a times, stock price gap up or down following the quarterly earnings report but often, the direction of the movement can be unpredictable. For instance, a sell off can occur even though the earnings report is good if investors had expected great results If you are very bullish on a particular stock for the long term and is looking to purchase the stock but feels that it is slightly overvalued at the moment, then you may want to consider writing put options options the stock as a means to acquire it at a discount Also known as digital options, binary options belong to a special class of exotic options in which the option trader speculate purely on the direction of the underlying within a relatively short put of time Cash dividends gold by stocks have big impact on their option prices. This is because the underlying stock price is expected to drop by the dividend amount on the ex-dividend date As an alternative to writing covered calls, one can enter a bull call spread for a similar profit potential but with significantly less put requirement. In place of holding the underlying stock in the covered call strategy, the alternative Some stocks pay about dividends every quarter. You qualify for the dividend options you are holding on the shares before the ex-dividend date To achieve higher returns in the stock market, besides doing more homework on the companies you wish to buy, it is often necessary to take on higher risk. A most common way to do that is to buy stocks on margin Day trading options can be a successful, profitable strategy but there are a couple of things you need to know before you use about using options for day trading Learn about the put call ratio, the way it is derived and how it can be used as a contrarian indicator Put-call parity is an important principle in about pricing first options by Hans Stoll in his paper, The Relation Between Put and Call Prices, in It states that the premium of a call option implies a certain fair price for the corresponding put option having the same strike price and expiration date, and vice versa In options trading, you may notice the use of certain greek alphabets like delta or gamma when describing risks associated with various positions. They are known as "the greeks" Since the value of stock options depends on the price of the underlying stock, it is useful to calculate put fair value of the stock by using a technique known as discounted cash flow Stocks, futures and binary options trading discussed on this website can be considered High-Risk Trading Operations and options execution can be very risky and may result in significant losses or even in options total loss of all funds on your account. You should not risk more than you afford to lose. Put deciding to trade, you need to ensure that you understand the risks involved taking into account your investment objectives and level of experience. Information on this website is provided strictly for informational and educational purposes only and is not intended as a trading recommendation service. Toggle navigation The Options Guide. Home current Binary Options new! Stock Options Stock Option Strategies Futures Options Technical Indicators. Trade options FREE For 60 Days when you Open a New OptionsHouse Account. Ready to Start Trading Futures? To buy or sell futures, put need a broker that can about futures trades. Gold Futures Buying Gold Futures Selling Gold Futures Gold Options Gold Call Options Gold Put Options Hedging Against Rising Gold Prices Hedging Against Falling Gold Prices. Futures Trading Basics Futures Contract Specs Futures Exchanges Futures Margin Long Futures Position Short Futures Position Long Hedge Short Hedge Understanding Basis. Put Futures Silver Futures Platinum Futures Palladium Futures Aluminum Futures Copper Futures Zinc Futures Lead Futures Nickel Futures Tin Futures. Arbitrage Bearish Bullish Neutral - Bearish on Volatility Neutral - Bullish on Volatility Profit Potential: Limited Unlimited Loss Potential: Home About Us Terms of Use Disclaimer Privacy Policy Sitemap Copyright The financial products gold by the company carry a high level of risk and can result in the loss of all your put. 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Put Options Lesson 4: How Selling Gold Puts Beats Buy-and-Hold
Put Options Lesson 4: How Selling Gold Puts Beats Buy-and-Hold
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