NICK KATIFORIS
OPTIONS - FUTURES - STOCKS - CFD’S - FOREX
 
Phone: 03 8636 3333  Email: info@nickkatiforis.com

One thing that can set financial and commodity markets on edge more than anything else is uncertainty. 

How does this uncertainty affect option buyers?

It is reflected in the price or premium that option buyers are prepared to pay for their options. In times such as these option buyers will be anticipating the possibility of relatively large directional moves in various markets from which they hope to profit handsomely. 

For example some might anticipate a large move in Gold. Because there is a greater possibility of markets making large erratic moves, option buyers see themselves with a greater chance of windfall profits and are therefore prepared to pay more to buy the option. 

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