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Commodity > Commodity Option

Commodity Option, Energy

Trade Type: CommodityOption
Trade Components: Option Data

A European Commodity Option gives the buyer the right, but not the obligation, to buy or sell a set amount of a commodity, at a predetermined price (the strike), at the end of the contract. For this right the option buyer pays a premium to the seller. Settlement can be either cash or physical delivery.

Only exercise style European is supported for commodity options.

This example is a bought (long position) commodity option that gives the right to buy (call option) WTI oil.

Commodity Option, Metals

Trade Type: CommodityOption
Trade Components: Option Data

A European Commodity Option gives the buyer the right, but not the obligation, to buy or sell a set amount of a commodity, at a predetermined price (the strike), at the end of the contract. For this right the option buyer pays a premium to the seller. Settlement can be either cash or physical delivery.

Only exercise style European is supported for commodity options.

This example is a sold (short position) commodity option that gives the counterparty the right to sell (put option) gold.