when spot moves, does futures also move the same magnitude ? if spot moves 200 pips, should one expect 200 pip move in futures or vise versa ?
Not necessarily. Remember futures have a time value built in to the price depending on how close they are to expiration, just like options.
what i meant is for eg.. futures now trading 1.2141 spot now is 1.2040 but say spot moves to 1.2400 ( up 360 pips ) can we expect futures to go up to 1.2500 and if it goes down, likewise ? my understanding is that spot and futures should not have the same price if futures is way out of expiring, and then try to merg during expiration .. so then if one moves, the other one should move same amount ( almost ) ...right ? then one can conclude the volitility of futures is almost the same as volitility of spot ?
I made this spreadsheet to compare the Dec 05 contract to spot futures for the month of September 05. The basis was pretty consistent and the ranges compared very well using end of day data even though it was a rollover month. Not sure how the minute data would match up.
wow Et rocks.. i dont know how to pay you guys back... very important data. reason i ask is because, going long ( both call and put ) will benefit a futures trader then. volitility is high enough to warrent this. 200 pip move normally should yield some profit.. and 200 pip move in a month is no brainer for eur / usd simply xercise it
avg move 100 pips... not enough to warrent buying options premium is too high also and time goes against you if one is long on options.. still a noob , but learning i think it is better to sell premium..but then every one is doing it...