Do you think futures are easier than options?

SpearPointTrader

Junior member
16 1
When trading futures "all" you have to do is work out twhere the wiggly line is going next

When trading options, you have to work out where the wiggly line is going next and BY WHEN it's going to do that.

Ergo, trading options is more difficult thatn trading futures.

Agreed.
 

Mike boschert

Junior member
13 0
Hey traded futures twice for 8-9 months each. Traded every day. Traded the night desk. It was a horrible delightful endeavor. Unhedged futures contracts is Deffinently where the adrenaline gets flowing. I blew up twice, my money. I started with less than 100k and made and lost on average 4000$ day. Giving and taking the whole way. Portfolio volatility off the charts. I learned how not to trade. Check out synthetic puts and calls. Using futures to hedge an options position is very expensive. Whipsaw can kill you . Synthetics if used right eliminates dynamic hedging. I would challenge any model out there to see what happens to your model if you go with some form of static hedging. About 7 years ago went with static hedging. Have never traded unhedged since. When I said worse case scenario is ," you get staying power and make money", I was obviously being fiscious. If I was a market preacher I would preach static hedging, then proper position size as a percentage of the portfolio. Couple these with a model that wins more than it losses, and makes more money when it wins verses it's losers. You are maybe onto something.
 

A Dashing Blade

Experienced member
1,373 170
Hey traded futures twice for 8-9 months each. Traded every day. Traded the night desk.
Apols Mike, thought you meant you had only made two trades.
. . . Deffinently where the adrenaline gets flowing.
Imo you have to be able to become absolutely emotionless when day trading futures. The other side of the coin to feeling good about wining is that you WILL feel bad about losing. This induces an unstable mental state (think Jimi Hendrix levels of feedback)
Have never traded unhedged since. When I said worse case scenario is ," you get staying power and make money", I was obviously being fiscious. If I was a market preacher I would preach static hedging, then proper position size as a percentage of the portfolio.
Personally don't get this idea of "hedging" a futures position. The need to hedge implies to me that one would be under-margined relative to your (mental) comfort level. Eg, for me, while minimum margin on the Bumnd is (iirc) EUR1250, my personal margin ie the figure I personlly use, is EUR5000
Couple these with a model that wins more than it losses, and makes more money when it wins verses it's losers. You are maybe onto something.
110%. To which I'd add that I personally believe that everyone goes through periods of consecutive lossses and periods of consecutive wins. I'd advocate agreessively scaling down one's trade size as soon as you start to make losing trades.

Just my personal 2p worth.
 

tar

Legendary member
10,443 1,313
if you buy options it is only for momentum market otherwise you lose money.

Same with Futures ...
 

tar

Legendary member
10,443 1,313
options (if you buy) expire worthless (you lose money) if price doesnt change, in futures in that case you dont lose.

Only OTM options will expire worthless , and you will lose the spread and commissions in the Futures if price doesn't change .
 

Mike boschert

Junior member
13 0
Right on about being non emotional when trading. I believe most traders would do better if they got rid of themselves. I realized that last blow up. My model is 100 percent mechanical. My trading record for last 7 is an anomaly. Long term positive expectations is where every trader should start when analyzing theirs or any trading model. I believe if the human is involved in trading their chances for success long term are less than the survival rate of a cicada. History is my gauge on this train of thought. New traders fire yourself and design a model that operates on statistics that repeat and are exploitable. These things are out their you got to find them on your own. Nobody will ever sell you a system that works. They would keep it to themselves if it worked. Some people have found a profit center in buying options. Look up Talebs trading model. Buys a otm put and a otm call. Non directional trade. Hedged to desired exposure. Risks small amounts of portfolio per trade. When one of them start making money take the money. Don't trade to get in the money, trade to make a percent. Choose volatile markets S&P for last year could have killed them. The last 2 months would have been profitable . I think Talebs model is best out there for being long only options. If I wasn't a long/short trader I would try Talebs model. If anybody try's this or has input lets hear it.
 

jcvmw1

Newbie
3 0
I think that trading futures is way easier than trading options. I know this does not apply to everyone, but I feel that futures, specifically emini sp 500 contracts are incredibly profitable. I basicly scalp all day and pull in about $850 a day. Whats your guys take on this?

this may not answer your question but there is a ton of good information on this website. I have spent many hours on it myself and even given a small donation, if I had more I would give it.

http://trading-naked.com/

But if you do make it over to Traders education website one that Joe Ross operates he is a stiff for futures and I agree with him.
 
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Splitlink

Legendary member
10,850 1,234
Maybe its just me, but I have found options extremely difficult. You have to be right on the money. With futures, I love the leverage and the liquidity

I left option trading and returned to futures many years ago, so I do not know what they are like in today's trading scene.

The wasting time decay is the most important. It is where the market makes its money from option buyers. I did all kinds of calendar spreads and other hedging tactics. It is all very complicated, IMO, compared with futures trading. Finally, I made money by buying far out, safer, options that had a lot of time before the wasting part of the option started. These prices reflected the moves of the asset but, IMO, were too expensive for the reward and the buyer had to have made his money and be out before that happened. I decided that futures trading was more profitable for the risk involved.

If I remember correctly, the time wastage started, seriously, about three weeks and, then, dried up a few days before expiry.

Anyway, as I said, I've forgotten a lot and others will have more up-to- date experience.

Covered options are used by those portfolio owners who do not want to sell their assets during a bad patch, to hedge their holdings. I wager that hedge funds have been doing that, very profitably, indeed, over the past 5-10 years , while, still, retaining the shares. They sell the option to others but at a price that, if unfortunately exercised, will leave them a profit on selling. IOW, their risk is that they may have to take a smaller profit. The option money is theirs to keep, in any case, and they have it, all, worked out before they start, which the ordinary trader does not.

I hope that this, probably, out of date information helps those who only see the pie in the sky.

Good trading.
 
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Splitlink

Legendary member
10,850 1,234
Which is to say that you run your losers . . .

:D I always found that my losers ran with no help from me.

My winners made peanuts and were rare.

If I was fortunate the price went up, while the wastage went down and I got out at the same price and ---guess what?-- I thought that I was doing well.

The sales routine was " Remember, unlike futures, with options you can never lose more than your stake" Quite true, like a monkey taking your peanuts and leaving you with the shell!
 
 
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