26. Investment experts mention the "positioning" advantage of options. What exactly do they mean?

That's probably the best question with which to conclude this discussion because it's of key importance.  It has to do with the well-known fact that major price movements - the kind that can make options especially profitable to own - frequently occur in response to specific economic or political events that may be anticipated but that can't be predicted with absolute certainty. Yet once these events do occur, there may be little or no opportunity for small investors to participate in the resulting price movement.

Example: A decision yea or nay by the Federal Reserve on some important issue can have a sudden and dramatic impact on interest rates, gold prices, the stock market, and currency values. An action by oil ministers or an escalation of hostilities can send oil prices soaring or nosediving. An announcement of new trade rules or subsidies can trigger a sharp movement in prices of agricultural commodities.

A principal attraction of options - some say the principal attraction - is that they provide a way to position yourself to profit on a highly leveraged, ground-floor basis if and when the anticipated events and price movements occur. And to do so with the knowledge that the most you can lose if you are wrong is the cost of the options.

Let's face it - we'd all like to trade the markets by getting in at the lows and getting out at the highs. Even if you're not particularly interested in speculating on market trends, surely you'd like to receive the highest price possible for the products you sell. But since none of us has a perfect crystal ball, we can't predict the future with absolute certainty. And that's why many have turned to options. Options allow the investor or savvy business planner to have their cake and eat it too.

Regardless of your investment or trading goals, you will like options because there are so many things you can do with them. Spreads, straddles, strangles - ask your broker about some of these potentially risk-limiting tactics. Depending on your comfort level or business needs, there's an option strategy out there for you.

Whether you will chose to trade futures or options, we at Fidelity Global Futures will guarantee you a professional, well organized support team. At our firm we can provide you with both technical and fundamental analysis on any given commodity, currency, or index you wish to trade. Our brokers are trained to provide you with the finest service the industry has to offer.

877-4LEVERAGE (877-453-8372) · 305-257-3337
Fax: 305-258-1867
P.O. Box 4479 · Princeton, Florida · 33092
www.fidelityglobal.com
 

(*Please note: futures and options trading involves risk of loss and may not be suitable for everyone)

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