Give the holder the right to buy a commodity at a specific price. Used when bullish on the underlying – to capture upside with defined downside risk.
Knowledge centre
Commodities
Harnessing opportunity while managing risk – a comprehensive guide to commodity options.
Overview
What are commodity option contracts?
A commodity option contract is a financial derivative that grants the investor the right, but not the obligation, to buy or sell a specific quantity of a commodity at a predetermined strike price before or at a set expiration date. They are used for speculation on price movements and for hedging against adverse commodity price changes in energy, metals and agricultural markets.
These instruments are used both for speculation – to profit from anticipated price movements – and for hedging, to manage and mitigate exposure to adverse price fluctuations in critical inputs or outputs.
Give the holder the right to sell a commodity at a specific price. Used for hedging existing positions or expressing a bearish directional view.
The case for options
Why trade commodity options?
Strategic flexibility
Whether bullish, bearish or neutral on a commodity, options offer tailored strategies that align with your market view and precise risk tolerance.
Portfolio diversification
Commodities behave differently from stocks or bonds, providing valuable diversification and inflation protection in volatile markets.
Risk management & hedging
Producers, consumers and investors use options to hedge against adverse price movements in critical inputs or outputs – defining risk upfront.
The strategy
Our commodity pillars
I · Energy
Crude · Refined products · Natural gas · Power
Crude oil options are employed to capitalise on energy price volatility or to hedge fuel exposure in industrial and transportation sectors. WTI, Brent, distillates and global gas benchmarks covered.
Instruments & venues
- Crude Oil (WTI & Brent)
- Natural Gas & LNG
- Gasoline & Distillates
- Power & Electricity
Precious and base metals
Gold · Silver · Platinum · Copper · Aluminium · Nickel
Agricultural markets
Grains · Softs · Livestock
Digital assets
BTC · ETH · Digital Assets
Personalised outlook
Your market interest profile
Select up to 3 commodity sectors to see a short market outlook and options strategy overview.
No sectors selected
Energy
Energy prices react quickly to supply decisions, weather and geopolitics. Options let you act on a view of crude, gas or power – or hedge fuel costs – with the risk defined at the outset.
Precious Metals
Gold and silver have preserved wealth across generations and often move differently from shares and bonds. Options can add or protect exposure without committing the full value of the metal.
Base Metals
Copper, aluminium and nickel follow industrial demand. Options allow a view on the economic cycle, and a bought option has a known maximum cost.
Agriculture
Grains, softs and livestock are driven by harvests, weather and the seasons. Producers and investors use options to hedge or to act on a seasonal view.
Crypto
Bitcoin and Ethereum are highly volatile. A bought option defines the maximum loss, but this sector carries a particularly high level of risk.
General information only, not investment advice. Your adviser will discuss an outlook suited to your objectives.
Our platform
How we use options at Invictus Heritage
Direct market access
Energy, metals and crypto options across all major exchanges.
Transparent pricing
Competitive commission structures with no hidden fees.
Secure online portal
Real-time account management and trade execution.
Educational resources
Continuous support and learning to develop your expertise.
Accessible minimum balance
An entry point for qualified individual investors.
Risk-first discipline
Risk is measured before return in every strategy we deploy.
Common questions
What is a commodity option contract?
A commodity option gives the holder the right, but not the obligation, to buy (call) or sell (put) a specific quantity of a commodity at a predetermined strike price before or at a set expiration date.
What is the difference between a call and a put?
A call option gives the holder the right to buy a commodity at a specific price – used when you are bullish. A put option gives the right to sell – used when bearish or for hedging an existing long position.
Why trade commodity options rather than futures?
Options provide defined risk (your maximum loss is limited to the premium paid) while offering significant leverage. They also allow you to profit from volatility alone, without necessarily predicting direction.
What is options leverage?
Option leverage magnifies exposure to the underlying commodity relative to the capital deployed. A small move in the underlying can produce a much larger percentage return on the options position – and, equally, a larger loss.
How does Invictus Heritage manage risk?
Risk is measured before return – always. We deploy position-sizing discipline, defined-risk structures and through-cycle stress testing across all strategies. Our Constantia (steadfastness) is embedded in every decision.
Ready to trade with purpose?
Open an account or speak to one of our specialists about a strategy aligned with your objectives.