Investors worldwide are discovering the enormous opportunities available
through commodity options trading. However, because commodities have differing underlying
characteristics from equities, commodity options behave differently as well. In this
book, two of the field’s most respected analysts present strategies built from the
ground up for commodity options. Carley Garner and Paul Brittain begin with a quick primer
on how commodity options work, how they evolved, and why conventional options strategies
often fail in the commodity options markets. Next, using detailed examples based on their
own extensive research, they show how to leverage the unique characteristics of commodity
options in your own trades. You’ll walk through trades from “top to bottom,” master
both long- and short-option approaches, and learn powerful strategies usually ignored in
options books. For example, the authors introduce synthetic swing trading strategies that
systematically reduce volatility from the market.
This book’s easy-to-use trading strategies are strategically employed by
the author’s clients every day: With Commodity Options, you can work to put the odds in
your favor, too!
• Why commodity options are different–and what it means to you
Understand key differences in the underlying assets and the logistics of market
execution
• Systematically rewrite the odds in your favor
Four ways to make winning trades more likely–and losing trades less common
• When to trade short options–and how to manage the risk
Why careful option selling may improve your odds of success
• Master strategies designed for diverse market conditions
Combine long and short options to create the right strategy for any market
opportunity
• Exploit short-lived trends through “synthetic” swing trading
Get the advantages of futures contracts without the volatility
Carley Garner is responsible for two popular investment newsletters,
The Stock Index Report and Bond Bulletin. She is a senior market analyst, broker, and
columnist at DeCarley Trading LLC located in Las Vegas and writes a monthly column for
Stocks and Commodities. She has been featured in Futures, Active Trader, and Option
Trader, and been quoted by Investor’s Business Daily and The Wall Street Journal.
Paul Brittain has 25 years experience in futures, including many years
designing innovative trading techniques. He founded Commodity Trading School to offer free
online trading seminars. As Alaron Las Vegas Branch Manager, he produces three
newsletters: The Beast, BigMacDaddy, and The Optionologist. He has been quoted by many
major news sources such as The Wall Street Journal andBloomberg News, and is a sought
after speaker/participant at industry shows across the country. He has written articles
for industry publications Futures Magazine, Active Trader, and Stocks and Commodities, as
well as been a featured trader in Traders Monthly.
Table of Contents
Introduction xix
Chapter 1: Option Basics: A Crash Course in Option Mechanics 1
Chapter 2: An Option Is an Option Is an Option…Think Again 11
Chapter 3: Long Option Strategies 35
Chapter 4: Short Option Strategies 53
Chapter 5: Credit Spreads 81
Chapter 6: Limited Risk Option Spreads 95
Chapter 7: Synthetic Swing Trading 105
Chapter 8: The Other Ratio Spreads 129
Chapter 9: Limited Risk Range Trades 139
Chapter 10: Synthetic Long Option Plays 151
Chapter 11: An Option Trade from Top to Bottom 165
Chapter 12: The Wizard of Oddz: Applying Option Strategies in the “Real
World” 185
Chapter 13: Margins and Option Trading 197
Chapter 14: Commodity Trading Myths 203
Appendix 211
Glossary 215
Index 251
288 pages, Hardcover