Why some people buy crude options?

Discussion in 'Energy Futures' started by crgarcia, Jun 19, 2008.

  1. Why give away time decay, when they could trade futures with minimal time decay?
    (sometimes even profit as time passes, when in backwardation)
     
  2. bettles

    bettles

    Maybe they can't afford the margins needed to hold a position outright?

    Maybe they can't deal with the possibility of a theoretically "infinite loss"?

    Maybe they are using them as a hedge for a futures position they already hold?

    Bettles
     
  3. cvds16

    cvds16

    maybe about all the people trading them as a directional play are selling options, and market makers taking the other sides are doing a volatility play ...
     
  4. selecto

    selecto Guest

    Yea, and maybe they just think price will go up.