Risk of Commodity Futures Trading
 
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Risk Factor: Options Vs. Futures



Do options carry less risk than futures?

Not necessarily.

If you plan to trade through an individual account and are considering trading options on futures contracts, you should familiarize yourself with the types of options (puts or calls) that you contemplate trading and the risks associated with each.

You should calculate the extent to which the value of the options must increase for your position to become profitable, taking into account the premium and all transaction costs.

You should also understand that certain market conditions (such as lack of liquidity), market rules, or the pricing relationships between the underlying interest and the option may increase risk.

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