Strategies For Reducing Commodity Futures And Options Risk
In an individual commodity futures and options account, there are certain types of orders (such as "stop-loss" orders or "stop limit" orders), which are designed to limit losses to certain amounts.
However, these orders may not be effective in limiting losses because market conditions may make it impossible to execute your orders at a reasonable price.
Strategies using combinations of positions, such as "spread" and "straddle" positions, may be as risky as taking simple "long" or "short" positions.
In a commodity pool, you should ask the pool about any strategies it employs to reduce risk.
As always, be extremely wary of claims of guaranteed profit and minimal risk.
