I'm learning a little dangerous knowledge about trading futures. Went through a learning module on TD website for the basics. Here's what i am not clear on.... What are you accomplishing trading, for example /ES vs OEX options?
Or QQQ or SPY Options. OEX IS S&P 100, I assume your question was a joke, my using it as a reference was a error, meant SPY.
No, question was not a joke. Never heard of OEX, and if OEX is SP 100, then I would think trading ES against OEX would not be equatable. Generally though, any question like yours should be asked in the options section, because in your case, seems you would want to use ES as a hedge against a SPY play.
Not necessarily, use of /ES could be speculation rather than hedging. I’m learning about futures, and that’s why I posted it here, the focus of my question was futures. The use of OEX , I don’t know where that came from, I used to trade OEX options decades ago, so it’s the first thing I thought of. let me rephrase, what’s the point of using futures if you get similar leverage and volatility with futures. Whether it’s QQQ OPTIONS VS /NQ or SPY options vs /ES
With options....you have to be right on direction, Right Now, if you want to make money. You need surgical precision, incision, timing. With stock or futures....your trading can be lazy or lax or inaccurate or patient for the ball to eventually land on your side of the court. The harder or more difficult or more riskier something is, the more, generally, Rewarding and lucrative it can be,
What read about futures is you can lose more monies than you invested or put in a trade. That is why I do not trade futures. The same goes with forex. Leverage works against you by a factor of 10. With a stock option, your maximum risk on a worst case scenario is to lose the cost of the premium, say $500.00 you used to buy a call or put option. Still, nothing prevents you from exiting and closing a losing options trade. So, you can sell when you have lost $200.00 and have $300.00 left in value for that option for the next trade. If you are correct and the stock moves a huge amount, you have the power of leverage and 100% or greater returns on that trade is possible.
Because with options, you have deal with all the greeks like time-decay. With futures, it's more or less straight forward. It can be used as a hedge or outright speculation. It's up to your imagination and your preference. I've seen both options traders and futures trader making a fortune in their respective arena. BTW there's also an option for ES.