Registered: Oct 2005
08-04-12 03:07 AM
Quote from cdcaveman:
How do you figure futures are better the options?
IMHO my goal is to get a position that exactly reflects my speculation on the market or prediction of future events. And, no more, as well as no less.
IMHO the downside to options is they expire. And, IMHO, the market is in denial (not wrong, its never wrong, just in denial) and will resist "marking to market" that Europe is bust. So it may take longer for events to force peoples hands than I would predict.
Compare the simple payback graph of say, buying a put, as opposed to shorting the future. With the put I have insurance against the index rising. But in my view of the future, I don't need this insurance, and I don't want to in effect "pay for it" by using the put option strategy.
Now certainly, there are more complex multi-leg options positions possible. Some of them may even pay their way. Or offer me longer odds and more bang for the buck. But these will have more transaction cost and spread than a simple futures position.