Time decay of futures options is a major factor option
traders must consider before they buy a futures option contract. Time decay of options means that options
theoretically lose money every day, since they have a limited life.
All futures option contracts have an expiration date.
Basically, an option contract is a bet that a market...
Live cattle futures had limit-down moves on Monday and
Tuesday, losing about 7 percent of its value in that rapid decline. The news
that rocked the market was a severely damaging fire at a Tyson Fresh Meats
plant in Kansas. The plant represents about 5-6 percent of the cattle
processing capacity in this country. Needless to say, cattle traders headed for
the...
Natural gas is suffering the woes of plentiful supplies this year and the lack of a catalyst to push prices higher. As a result, natural gas futures prices have dropped about 28 percent from the peak this year in March. The fundamental picture doesn’t look good at this point and the market will probably need some significant...
The energy markets became riled over the weekend as Saudi
Arabia took a major hit to oil production/distribution capabilities from drone
attacks. Fingers are pointing at Iran and they have deferred to Yemen. The big
issue here is whether this is the beginning of regular attacks and the
disruption of oil flowing onto the markets or was it an isolated event?
The benefits of managed futures have been widely documented for
lowering the overall risk of an investment portfolio, while increasing the opportunity
for higher returns. Institutional investors
have made managed futures an increasingly popular investment class during the
last couple decades because of this. However, managed futures are virtually
unknown to the average investor.
The managed futures investment...
