Closing option contract

[hhiusa]

As I said I believe that oil prices will go up and I want to make a couple bucks on that.
I didn't know what to start with and started reading about futures and options. Because options imply limited risk (when you don't go short) I thought that it is pretty suitable for me.

I also maybe bought oil by itself but I neither know any details nor have experience.

I am just trying to earn extra money apart from my usual work.

You have got that inverted, options do not have limited risk Stocks would be your best bet. I can tell you now with your current knowledge of options you are 99% likely to lose that money instead of gaining money.

If the option doesn't go above the strike price of your underlying instrument you forfeit the entire premium.

Oil is a commodity and thus it is a derivatives product you can never buy the underlying instrument unless you're a major corporation taking physical possession of the goods.

 

[dimzakharov]

By saying limited risk I meant that I can loose only premium and if I don't go short then I cant' loose more than premium.
Would it be correct to say that I won't be able to exercise an oil option contract i.e. buy the goods?

Thank you for your advise. I really appreciate your time. I will take a look at Stocks. I suppose I need to take a look at stocks of oil companies.

At work I sometimes have spare time and I try to use it with some use for myself and now I am looking for an extra income.

 

[T44]

http://www.amazon.co.uk/Options-Pla...7280&sr=1-1&keywords=options+plain+and+simple

A good book on the basics of options.