Common use of Buying Options Clause in Contracts

Buying Options. Buying options involves less risk than selling options because, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maximum loss is limited to the premium, plus any commission or other transaction charges. However, if you buy a call option on a futures contract and you later exercise the option, you will acquire the future. This will expose you to the risks described under “futures” and “contingent liability investment trans­ actions”.

Buying Options. Buying options involves less risk than selling options because, if the price of the underlying asset moves against you, you can simply allow the option to lapse. The maximum loss is limited to the premium, plus any commission or other transaction charges. However, if you buy a call option on a futures contract and you later exercise the option, you will acquire the future. This will expose you to the risks described under “futures” and “contingent liability investment trans­ actionstransactions”.

Buying Options. Buying options involves less risk than selling options because, if the price of the underlying asset moves against youthe Client, you the Client can simply allow the option to lapse. The maximum loss is limited to the premium, plus any commission or other transaction charges. However, if you buy the Client buys a call option on a futures contract and you later exercise exercises the option, you the Client will acquire the future. This will expose you the Client to the risks described under “futures” paragraphs 6 and “contingent liability investment trans­ actions”.13 of this Appendix