Buying options based on futures

Discussion in 'Options' started by Marsupilami, Jul 6, 2005.

  1. Hello,

    I have a general question concerning options.
    In another thread there was a discussion about options on the Korean Kospi Future

    The interesting fact about these options is that they are extremely liquid ! In fact, these options produce the highest volume worldwide ( compared to other options). The spread in the ATM options is one tick, the underlying index makes some nice moves.

    Now - I learned that one needs to put a margin for these options, since they are based on the future, not on the cash index.

    How do you calculate your actual leverage ? It's confusing to me, because options itself are already leveraged. Now you have to combine the leverage with the margin...

    Could somebody enlighten me on how I can calculate the leverage ?

    Thanks !