Options on futures WTF?!?!

Discussion in 'Options' started by Saltynuts, Jan 28, 2020.

  1. Saw someone mention these, I've never been even remotely a big enough hitter to have gotten into these. I need to start learning. But off hand, take a future, I sell an SP500 future for 3200 with a May 2020 expiration. So that means if SP500 ends below 3200 I get the delta (plus the sales price), above 3200 I lose the delta (offset by the sales price). Something like that.

    So if I have an option on that future, is it literally I have the option to get the economics if I had sold that future? I dunno, it just seems so derivative, like higher order, seems so weird.

    Sorry for the newb question. Thanks.
     
  2. redman

    redman

    Vix
     
  3. Robert Morse

    Robert Morse Sponsor

    https://www.cmegroup.com/education.html

     
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  4. FriskyCat

    FriskyCat

    ES futs options have 3 expirations per week (M/W/F), plus end of month expirations. Liquidity is good, spreads are reasonably tight, etc. It's about the only thing I like to trade in binary markets such as these. (FWIW I traded ES futures since they launched in the 90's, but for holding longer term positions, the ability to sleep at night, I migrated to the ES futs options almost exclusively).
     
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  5. shatteredx

    shatteredx

    I thought about switching to ES options instead of ES, but the ES options have awful (~8%) spreads overnight.
     
  6. FriskyCat

    FriskyCat

    You can still typically fill at the mid-price. Also depends on DTE and other factors such as strike price, etc.
     
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