Which contract to choose?

[pb]

Newbie question:
When you enter a position, what contract do you normally choose? For example, today I can choose from FTSE Sep, Oct, Nov or Dec contracts. I am inclined to go for Dec contracts, because that leaves plenty of time for me. But is there a trade off?

Today FTSE closed say, at 4459, but the Dec contract is now at 4499-4605. Although there is the ovious cost of carry, will the Dec contract follow the movements of underlying index just as the Sep contract does?
Thanks.

 

[sidinuk]

with a spread of 106 (4499-4605) points I wouldn't trade the Dec contract!

All the contracts will follow the underlying but the closest contract will always be the most liquid. Which one you trade depends on the timescale that you are looking at for your target to be reached.

 

[pb]

Oops I meant 4505

 

[stevet]

with indicie futures, always choose the near contract - until a week before expiration - and for some right up to expiration - but in time and with experience you will learn the ways to trade the others

 

[pb]

Stevet, Could you elaborate a little ?

I prefer to trade the later contracts because that gives me the breathing space (I don't day trade, only swing). Could you explain a little bit more what you mean by learning the ways to trade the others with experience?

Thanks a lot.

 

[TWI]

Quite simple with indices.
All volume in front month.
FTSE today:
Sep 14825 contracts traded
Dec 96 contracts.

 

[FetteredChinos]

is that you trading december Tw ?