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A long put strategy gives the holder the right, but not the obligation to sell futures at a specific price for a specific period of time.

This position profits if prices decline. Profits are unlimited on the downside; total risk is limited to the premium paid. Increasing volatility favors this position, while the passage of time works against this trade. Hedgers can buy puts for unlimited downside protection, yet still participate in a rising market. This strategy is also known as a "floor."

Position
Premium
Dollar Premium
Delta
By one $20 crude oil put $1.17$1,170 +.48
Maximum risk $1.17 per barrel$1,170 per contract 00
Maximum profit Unlimited on the upside00 00
Break-even futures price $18.8300 00

Position
Premium
Dollar Premium
Delta
By one $260 gold put $6.70$670 -.50
Maximum risk $6.70 per oz.$670 per contract 00
Maximum profit Unlimited on the upside00 00
Break-even futures price $253.3000 00

  

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