I'm looking for brokers that give a plateform to trade online options on futures indices, commodities and forex. Does that just exist ? IB only trade futures options on emini S&P.
To buy a 1 lot of equity options, the comm is around $1.5, to buy a 1 lot in the grains, crude,metals the FCM's charge $15 maybe a little less for active traders. Can anyone please give me a cogent reason why anyone would trade options on futures actively (i.e. more than 10 times per week) when the comm handicap is so huge and the fact that bid/offers have to be accessed thru a person? Am I missing something in the calculation that indicates that the rates of futures vs. stock options are at least a factor of 9? Thanks in advance
GATrader, Well, the owners of the casinos have to keep coming up with new games to keep profits high, don't they? The leverage in some of the Options on Futures looks incredible, perhaps that is the draw? Also, the same reason (most) small investors buy options in general, the hope of the home-run on the small investment (lottery ticket).
So no one specially from the FCM community can offer a good explanation why options on futures should be more expensive by a factor of about 10 vs. stock options. no arguments about futures are better blah blah hence our commish are 10 times greater....Hmm.. not even a feeble attempt? Truly dissapoiting coz i was looking into trading them for the grains and energies are rocking. However,I don't think I am good enough to offset that handicap of a 10 factor in coomish
If you had longed the dec or jan 25 calls on crude when it was at $24.80...you'd be up so much that the commissions wouldn't matter.
Yeah, after the fact you would. It is pretty easy to play Monday Morning Quarterback though. I think GATrader's point is, that it does not pay to play the Options on Futures game for the long run, because you give up so much edge.
But don't you pay more for futures options because of the spot size of the futures lot? We discussed leverage in this thread. BTW, I did tell people to buy dec 25 calls on crude when it dipped below $25. Nobody listened to me. I only trade equity options and spread on the OSX are terrible so I don't play them.
If you are an active trader, comissions of $5/RT are pretty easily negotiated with most clearing FCM's. It's still higher than equities, but 1/3 what you are quoting. Jessie