The Best Commodities Website on the Internet
The Smart Profits Report; Issue #318
Thursday, June 15, 2006
The Best Commodities Website on the Internet
By Lee Lowell
Advisory Panelist, Mt. Vernon Research
Whether you’re an amateur investor or master trader, one thing is clear: In this day and age, you need to obtain your investment research and data from quality sources.
In Tuesday’s issue, my colleague Jim Stanton told you about the archaic way he used to go about getting stock and options prices back in the early 1980s, and how far investment technology has come since then. I’ve been trading commodity options professionally for about 14 years now and like Jim, I’ve seen some major advances in research and data over that time.
There are a vast number of websites you can go to get information, but picking the best ones can sometimes be tricky. How do you know they have the best information available? Today, I’m going to give you the benefit of my options experience, both as a professional commodities trader and former market maker on the floor of the NYMEX, and give you the best commodities website on the internet that I use every day for getting commodities quotes. And the greatest part? It’s free…
The Best Commodity Quotes And How To Use Them
My favorite site is FutureSource.
Quite simply, if you don’t want to pay for a fee-based service, just go here and you’ll be able to do just about everything that a high-end subscription service offers.
When you get to the homepage, you’ll see tabs along the top. You can choose to see charts, quotes, option chains and read the latest commodity news. The site also has a section, named “My FutureSource,” which allows you to set up these choices any way you like and create your own personal, free workspace.
If you’re serious about trading commodities, then this is the site for you.
To pull up quotes, simply click on the “Quotes” tab at the top. This will take you to a page where you can either pick the exact commodity you want, or you will see commodity groups. These include meats, grains, energies and metals. Type “S” into any one of the blank symbol boxes and the page will bring up soybean futures, along with all the trading months available.
FutureSource At A Glance
Take a look at the snapshot of that page:
Once you’ve decided which soybean month you want options prices for, click on the middle icon in the far left-hand column. This will bring up the relevant options chain.
In this case, I’ve chosen the November 2006 options:
As you can see, there are two drop-down menus at the top of this screen. This lets you choose which type of options chain you’d like to see. To the right, I usually like to opt for the “Adjacent” menu as it shows the call options on the left and the put options on the right. It’s easier to see the numbers that way.
The other drop-down menu lets you choose the refresh rate for the options. Since this is a free site, option quotes are delayed by the amount of time set by the specific commodity exchanges. Quotes on most New York markets are delayed by 30 minutes and by 10 minutes on the Chicago markets. You can either manually refresh your browser or use the auto refresh option from the menu.
In the far right-hand column of the chain, you’ll see the number of days left until the options expire. In previous Smart Profits issues, we’ve talked extensively about time decay and how longer-term options offer the best value, so this is a key piece of information.
One Major Difference Between Stock Options And Commodities Options
One extremely important thing you need to know about commodities options is that the price breakdown is not the same as with stock options.
With stock options, each contract is based on a multiplier of 100. For example, if you bought a stock option for $2.25, that would equate to $225.
However, each commodity has different multipliers. For instance, a soybean option has a multiplier of 50. So if you bought a soybean option for 20 “ticks” or “points,” that would equate to $1,000 in total dollars.
Before you decide to invest in any commodity option, it’s essential that you know what its point multiplier is, as it can affect your price in a way that you might not be prepared for. You can find each commodity’s point multiplier from their respective trading exchanges.
Put Your Investment Future In Good Hands
Despite being recently acquired by eSignal, Futuresource.com naturally also offers its own datafeed product that you can buy, in addition to the free service that it offers.
I get many requests from friends as well as attendees at our option conferences to where the best place is to get commodity option quotes. I always tell them that if they’re not subscribing to a data retrieval service or using their broker, Futuresource.com is still my favorite place.
And since I’ll be launching my own commodity options advisory service in the near future, I also want to give you the easiest way to get commodity option quotes. Use Futuresource - it’s well worth it.
Good Trading,
Lee Lowell
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Today’s Smart Profits Cribsheet
- Surf on over to FutureSource and check it out for yourself, the best commodities website on the internet.
- With the strong, ongoing bull market for commodities set to continue, it’s a sector that’s well worth your attention. Mt. Vernon Research Chairman Karim Rahemtulla shows you how you can profit by setting up your own commodities-based “Mini Hedge Fund“.
- I talked here about the importance of noting options expiration dates and time decay, so you always get the best value for your investment dollars. Read about this in more detail in one of my previous Smart Profits Report: #307: A Lesson on Time Decay and How to Go In-The-Money for Top Buys
Related Articles:
- Option Chains: How to Pick the Right Option if You’re Bullish on a Stock
- The Chicago Board of Options Exchange: The Website Every Options Trader Should Know
- Time Value: With Options, You Need to Be Right on Time
