FACT: Approximately 80% of all Futures Options Purchased Will Expire Worthless*
One of the key components of a futures option premium value is time to expiration.
Unfortunately for the buyer of an option, time value is always ticking away — decaying away.
Let us show you how to use time decay to your advantage…
Should You Be Buying or Selling Futures Options?
Did you Know? — The time value of a futures option will start to drop at a much faster rate as it approaches it’s expiration date.
Futures Options Time Decay
Typically, there are two groups of investors, the public or individual investors and the experienced or professional investors.
The first group, the public, typically will invest in options by purchasing them. If the public is buying, some other group must be selling. Enter the experienced or professional investors. The “pros” will be the group typically selling futures options to the public because, unfortunately, the average public investor get’s it wrong and loses money when trading futures options.
As mentioned above, according to the CME Group (Chicago Mercantile Exchange), approximately 80% of all options purchased will expire worthless. This shifts the probabilities in the option seller’s favor considerably.
At Insignia Futures & Options, we have account plans available based upon your futures options trading experience level.
Choose the plan that is right for you…
Experienced Futures Options Traders
New to Futures Options Trading
Our Self-Directed Account Plan is perfect for the experienced futures options trader who is confident in making his or her own trading decisions.
Experience the latest in advanced futures trading technologies on your computer, smart phone or tablet. Our ‘leading edge’, on-line futures trading platforms offer a ‘user friendly’ order entry system, plus direct to the futures exchange order routing.
Unlike many other commodity futures brokers, Insignia Futures & Options offers futures options sellers the exchange minimum SPAN margin requirements for all option short and spread positions. Other futures brokers may increase their margin requirements for their clients who sell futures options or simply will not allow the selling of futures options at all.
Test drive our Firetip/InsigniaTrader trading platform to get a feel for the simplicity of placing futures & futures options orders with real time market data.
Our Traders Advantage Account Plan provides you with the tools, mentoring and trade recommendations to help you become a better informed trader.
Designed for the beginning futures options trader or investor new to futures options trading. This plan provides clients with the tools, education and training to become a better-informed trader.
You will be personally guided through the trading steps and strategies used when selling futures options by our principal futures trader, Joe Fallico. Joe is a commodities futures broker with over 25 years of experience. He is both Series 3 and Series 30 registered and is also the author of the futures options trading strategy book, The Time Writer Option Strategy.
Are you ready to take the next step and open your own futures options trading account?
*Source: CME Group (Chicago Mercantile Exchange)