An option on a futures contract is the right, but not the obligation, to buy or sell a specific underlying futures contract at a certain price on or before the option’s expiration date. They are similar to stock options, but are different because the underlying instrument is a futures contract.
On-Demand Webinar
Join Tradovate for a webinar hosted by Futures.io where we discuss trade setups, profit targets & trading strategies using Profile charts.
TPO profile charts allow the user to analyze the amount of trading activity, based on time for each level the market traded at, for any given period of time. This allows you to easily see the areas where the market is trading most of the time and helps you analyze price, volume, and time in a single chart.
As you analyze TPO Profile Charts there are some important things to note that you can use for trading throughout the day, but you need to ensure you understand the bigger picture first. You should have a view of what the market is trying to do. And is it doing a good job of it?
ON DEMAND WEBINAR
This is a must-see webinar for futures traders. Learn how you can leverage the liquidity of the futures market with 1/10th of the cost of standard contracts with Micro Mini Options. They can help you add control over the risk/reward ratio of your investment, manage risk with a choice of option expirations and expand your trading strategies. David Lerman, Director of Education at CME Group will walk you thought how active traders can use these instruments to round out their trading strategy.
“Price advertises, Time regulates and Volume confirms or rejects opportunities” Quote - Jim Dalton
Next to the TPO Profile is a Volume Profile and that's something you may or may not be familiar with. Here we have it set side by side and we do that for contrast so we can see volume as well as TPO profile. The one with letters is the TPO Profile and that is time-based, whereas the other profile is the volume profile and that is built based on how much volume is trading at each price.