(*Please note: futures and options trading involves risk of loss and may not be suitable for everyone)
Click here to download entire 29-part FAQs (~ 47KB)
1. What exactly is an option? 2. What is my maximum risk if I buy an option? 3. Doesn't this make options a risky investment? 4. Why have options on futures become such an increasingly popular investment? 5. Other than "call" and "put" what terms do I need to be familiar with? 6. How are profits realized in option investing? 7. As an example, suppose I buy an option to purchase one contract (1,000 barrels) of crude oil at a strike price of $25/ barrel and the price of crude oil goes to $30/barrel, what's my profit? 8. How large is my profit potential when I buy an option? 9. At the present time, what options can be purchased? 10. How long is the life of an option? 11. When I buy an option, how is the premium cost arrived at? 12. What major factors influence the premium cost of a particular option? 13. Exactly how much does the price of the commodity have to change in order for me to realize a profit on the option? 14. It's often said a major advantage of options is "leverage". What does this mean? 15. But can't leverage work both ways, against as well as for you? 16. Once I've bought an option, will there be a continuing market for that option? 17. Suppose an option I've bought very quickly becomes profitable. Do I have to wait until the expiration date to sell it? 18. Can I sell an option even if it isn't currently worthwhile to exercise? 19. Can I follow an option's current market value on a regular basis? 20. How much should I know about the underlying commodity in order to consider investing in options? 21. When I purchase an option, who is the party on the other side of the transaction? 22. Who assures payment on exchange-traded options contracts? 23. What brokerage commissions are involved in buying options? 24. What place do options have in an overall investment program? 25. How do options compare with other investments that involve similar risk and reward profile? 26. Investment experts mention the "positioning" advantage of options. What exactly do they mean? 27. How Do I Open an Account with Fidelity Global Futures? 28. What if I don't know anything about trading? Will someone be available to help me? 29. Why don't other brokers offer this level of service?
877-4LEVERAGE (877-453-8372) · 305-257-3337 Fax: 305-258-1867 P.O. Box 4479 · Princeton, Florida · 33092 www.fidelityglobal.com
