SSFs have been handy for me when I wanted to short something quickly in response to news w/o worrying about uptick rules or figuring out which put was appropriate (ie, doing something reactively v. proactively thru options) SSFs are spot price action -- ie, no greeks -- therefore I use SSFs to get in and out quickly on some 'surprises' during the day...such as with CFC a few weeks ago when it began to seriously implode.
They're completely different instruments with almost nothing in common except they derive from an underlying equity. The biggest differences among many are that SSFs are not impacted by time decay and volatility. They will generally more accurately track the performance of the underlying. This may be of help regarding options pricing: http://www.investopedia.com/articles/optioninvestor/04/121604.asp
They correlate on synthetic LIBOR. SSFs and option conversions and/or boxes can be a vehicle to earn nearly the risk-free rate. SSFs are simply forwards on shares. Shares with embedded carry.
Long call, short put (same strike, expiry) is equivalent to a SSF of the same duration. Short call, long put is (same strike, expiry) equivalent to short SSF. A difference is pin risk and early assignment risk of the options. To answer your question - comparing equivalent positions - SSF = one leg, one commission Options = two legs, two commissions. I've traded SSFs only one or two times because they were not liquid enough for my purposes.
Any caveats, besides liquidity, with SSFs? And, if doing, say Calendar calls (Long ITM Leap / short OTM near term call) what would be the advantage of doing it with a SSF rather than a Leap?
Options have many spreads and fancy terms. More things to figureout. When you figure them all out you see their worth in a much diffferent way. Going to futures is what you wanted the optoin to do all along if you are a shrot term directional trader who likes leverage. Time frame and style need to be addressed in this question.
Buying ITM LEaps that are generally 2.5 to .35 the price of the stock. SSF would give me a little more leverage, but I'd have to roll out every three months. So is the small about of leverage boost for a six to 18 month holding period worth it? (Also writing short term OTM calls, but probably not relevant to the SSF versus ITM Leaps question.) ATM or slightly ITM Leaps seem to have it over SSF in terms of leverage, no doubt. But the deltas of an ATM Leap versus the SFF seem like a point in favor of SFFs. So is the bottom line, leverage versus delta? Want maximum leverage, stay with Leaps. Want better movement versus the underlying, stay with SSFs?