The Standardized Items in Any Futures Contract.
Future option trading is involved in customization of the contract between two parties to buy or sell a certain quantity of certain commodity at a specified price on a specified future date. Most of the times, they called it "forward contract" as in options trading world.
Futures being traded on exchanges have terms standardized by the exchange. The standardized items in any futures contract are:-
- The quantity of the underlying product
- Quality of the underlying product (not required in financial futures)
- The date and month of delivery
- The units of price quotation (not the price itself) and minimum change in price (tick-size)
- The location of settlement.
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Ratio put spread
What is Ratio put spread
The Ratio put spread is a compound options trading strategy that consists of a number of long puts with higher strike prices and a larger number of short puts with a lower strike price. The maximum profit is realized when the currency price is at the lower strike price. This combination has two break-even points.
Tags: break even point, downside risk, long calls, options trading strategies, ratio put spread, strike prices, upside risk
Commodity Futures Trading Commission (CFTC)
What is Commodity Futures Trading Commission (CFTC)
An independent agency created by Congress in 1974 with a mandate to regulate commodity futures and options markets in the United States. The CFTC’s responsibilities are to ensure the economic utility of futures markets, via competitiveness and efficiency; ensure the integrity of these markets; and protect the participants against manipulation, fraud, and abusive practices.
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Tags: Commodity Futures Trading Commission, commodity options trading, futures options trading
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