What is my maximum risk if I buy a commodity option?
What is the nature and amount of
downside risk? In the case of commodity options, your maximum risk that could lose the money that you invested purchasing
the options, plus brokerage fees and transaction costs. Regardless of what happens in the market when buying options
on futures your risk is limited to your entire investment, yet your profit potential is unlimited. On
the contrary, if you sell or grant an option your risk may be greater.
Commodity
futures are generally considered more risky than commodity options on futures.
