The document discusses commodity options trading and strategies. It notes that options can provide limited or unlimited risk and profit potential depending on whether one buys or sells calls or puts. It also explains that speculators who think a market is overbought may opt to sell call options rather than futures or puts, as it provides more room for error than those other strategies if the market moves against their position. The focus is described as practical hands-on guidance for traders.

2. www.DeCarleyTrading.com

3. “Hidden behind the warm
and fuzzy palaver is fierce
intelligence and an aggressive
stance—Commodity Options
is a real wolf in sheep’s
clothing.” ~ Phyllis Feinberg
with The Investment
Professional

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12. Call Put
Limited Risk/
Buy
Unlimited Profit
Unlimited Risk/
Sell
Limited Profit
Call Options – Give the buyer the right, but not the obligation, to buy the
underlying at the stated strike price within a specific period of time. Conversely,
the seller of a call option is obligated to deliver a long position in the underlying
futures contract from the strike price should the buyer opt to exercise the option.
Put Options – Give the buyer the right, but not the obligation, to sell the
underlying at the stated strike price within a specific period of time. The seller of a
put option is obligated to deliver a short position from the strike price (accept a
long futures position) in the case that the buyer chooses to exercise the option.
Keep in mind that delivering a short futures contract simply means being long
from the strike price.

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24. Speculators that
believe a market is
overbought and
due for a correction
may look to sell a
call option as
opposed to selling a
futures contract or
buying a put
option.

25. Futures traders face
immediate risk of
incorrect
speculation;
likewise put buyers
must be accurate in
timing and
direction in order to
overcome premium
erosion. Short call
traders enjoy ample
room for error
because risk of loss
at expiration doesn’t
occur until the
futures price trades
above the reverse
break even point of
1394.20.

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35. “The focus is resolutely
practical: this is indubitably a
hands-on self-help manual
for traders.” - Phyllis
Feinberg, The Investment
Professional

36. www.DeCarleyTrading.com