Options on Futures

I know that most of you are day traders. That said, do any of you that are swing traders use options on index futures to hedge overnight/longer term positions.

Thanks.

 

Needless to say!

 

And what is the point of hedging?

Hedging with options is a fetish beloved by brokers and market makers who get to collect double commissions and double spreads.

If you don't like your postion then get out of it. Cash is the perfect hedge.

If you are long futures and buy puts to hedge you could have the exact same position by just buying calls in the first place. And if you are short futures and buy calls to hedge you could have the exact same position by just buying puts in the first place.

 

Needless to say, too!

 

Thanks for your opinion

"And what is the point of hedging?"

I have my reasons

"Hedging with options is a fetish beloved by brokers and market makers who get to collect double commissions and double spreads."

It is also a very valid form of risk control if it is cost effective.

"If you don't like your postion then get out of it. Cash is the perfect hedge."

I like my position on a swing but acknowledge it could go hard against me between now and my target price. Cash is not a hedge, it is a position and lots of gains can be had from holding overnight. Losses too, thus the hedge.

"If you are long futures and buy puts to hedge you could have the exact same position by just buying calls in the first place. And if you are short futures and buy calls to hedge you could have the exact same position by just buying puts in the first place."

On the surface that may be true, but there is some math involved that makes it slightly more complicated. The cost of an ATM Call option with a Delta of 1 will be much higher than an OTM Put used for risk control.

So why don't I just put in a SL overnight? Because I have had them poached before to my disadvantage. Thus, I am exploring other solutions to manage the risk.

Thanks