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.
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.