How to Buy Oil Options http://www.options-trading-education.com/24006/how-to-buy-oil-options/ The oil market is often very volatile. Crisis in the Middle East, turmoil in Ukraine and rebellion in Nigeria all threaten to drive oil prices up. Fracking technology is driving the USA toward not only oil and gas independence but a renewed status as an exporter. This fact promises to drive oil prices down. A viable way to deal with the volatility of the oil market is trading oil options. We have written about analysis and strategy in relation to trading options on oil stocks, oil exploration companies and options on oil futures. Now, as a practical matter we talk about just how to buy oil options. Options on What As noted above you can profit from price movement of big oil stocks, oil exploration stocks and oil futures. How to buy oil options is pretty similar no matter which way you go. In the USA, traders trade futures on the NYMEX. Traders trade options on the CBOE, the Chicago Board Options Exchange. Big oil stocks and oil exploration stocks trade on the NYSE. Today we will look at how to buy oil options on oil futures using the CBOE. Chicago Board Options Exchange: CME Group In this article we are interested in options on futures contracts, specifically crude oil futures. According to Investopedia: An option on a futures contract gives the holder the right to enter into a specified futures contract. If the option is exercised, the initial holder of the option would enter into the long side of the contract and would buy the underlying asset at the futures price. A short option on a futures contract lets an investor enter into a futures contract as the short who would be required to sell the underlying asset on the future date at the specified price.

1. BY
WWW.OPTIONS-TRADING-EDUCATION.COM
How to Buy
Oil Options

2. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
The oil market is often very volatile.
Crisis in the Middle East, turmoil in
Ukraine and rebellion in Nigeria all
threaten to drive oil prices up.

3. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Fracking technology is driving the USA
toward not only oil and gas
independence but a renewed status as
an exporter. This fact promises to drive
oil prices down.

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5. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
A viable way to deal with the volatility of
the oil market is trading oil options.

6. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
We have written about analysis and
strategy in relation to trading options on
oil stocks, oil exploration companies
and options on oil futures.

7. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Now, as a practical matter we talk
about just how to buy oil options.

8. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Options on What

9. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
As noted above you can profit from
price movement of big oil stocks, oil
exploration stocks and oil futures.

10. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
How to buy oil options is pretty similar
no matter which way you go. In the
USA, traders trade futures on the
NYMEX. Traders trade options on the
CBOE, the Chicago Board Options
Exchange. Big oil stocks and oil
exploration stocks trade on the NYSE.

11. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Today we will look at how to buy oil
options on oil futures using the CBOE.

12. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Chicago Board
Options Exchange:
CME Group

13. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
In this article we are interested in
options on futures contracts,
specifically crude oil futures. According
to Investopedia:

14. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
An option on a futures contract gives the
holder the right to enter into a specified
futures contract. If the option is exercised,
the initial holder of the option would enter
into the long side of the contract and would
buy the underlying asset at the futures
price. A short option on a futures contract
lets an investor enter into a futures contract
as the short who would be required to sell
the underlying asset on the future date at
the specified price.

15. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Regarding crude oil futures and
options, the CME Group says:

16. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Light Sweet Crude Oil (WTI) futures
and options are the world's most
actively traded energy product.
Customers around the world have
sought out WTI futures for price
discovery and risk management for
more than 25 years.

17. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
How to buy oil options is to set up a
trading platform that is compatible with
your broker and then trade crude oil
futures options via that platform. Then
the issue is how to make money in the
process.

18. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Fundamental and
Technical Analysis

19. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
And we come full circle. The world of oil
prices can be very volatile.
The same volatility can lead to profits
or losses.

20. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Those who stake out solid positions
with options trades typically make
money.

21. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
Those who use options when buying oil
futures are able to limit any losses to
the amount of the options contract.

22. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
To make money in this world the trader
needs to be familiar with the factors
that drive oil prices and up to date with
what is happening to those factors.

23. http://www.options-trading-
education.com/24006/how-to-buy-oil-options/
This, in the end, follows the law of
supply and demand and successful
options traders make money in oil
options by understanding both the
market fundamentals and short term
market sentiment.