Understanding and Trading Futures Options.

Options on futures, or futures options, are one of the most versatile risk management products. The basic concepts, price behavior and terminology are much the same as listed equity options, as are a majority of the most frequently used strategies. There is one major contract difference: the underlying instrument. With futures options, a call buyer obtains the right to buy, or go long, its specific underlying futures contract, with a put buyer gaining the right to sell, or go short, the underlying future.

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