Options vs. Futures, what's better?

Discussion in 'Trading' started by stv17, Aug 29, 2019.

  1. stv17


    I'm trying to phase out of equity day trading and try different markets. I looked a little into options and futures.
    What do you guys think is easier (easier to learn, less risk, more profitability etc.) to trade? and what are the pros and cons of these 2 markets?

    Last edited: Aug 29, 2019
  2. Robert Morse

    Robert Morse Sponsor

    Derivatives are never "easier" to trade. They require more knowledge.
    tommcginnis likes this.
  3. I don't think there is anything "easy" about either of them.
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  4. dangkevin


    Stock index futures might be a good transition for stock trader.
    tommcginnis likes this.
  5. tommcginnis


    In equities, you get 2:1 leverage.
    In derivatives, you get 50:1, 100:1, 1000:1, and what's oil?? :rolleyes:
    That's what you want to focus on, first: leverage.

    Riskier? Less Risky? More reward? These things all balance reward against risk.
    If you have an equity position on that changes 1.0% today, you'll notice -- maybe.
    If you have a derivatives position on, that changes by 1%? Woof! You'll notice, alright.:caution:

    All that said, futures (to my eyeballs) don't trade all that different than equities.
    Options, though -- being insurance on the downside and on the upside -- are a wholly different animule -- even to the point of being *unrelated*. Look up "synthetic position" -- that's an option position that trades like an equity AND has a time-decay component, too. That's about as simple as option trading gets. From there, things get 3-4-dimensional fast. KNOW YOUR RISK GRAPHS.
    Last edited: Aug 29, 2019
  6. guru


    Futures for day trading, options for swing & long-term.
    Though for some people it may be the opposite.
  7. tommcginnis


    ES long/short swings
    SPX short option spreads: "Please be nimble!"
    guru likes this.
  8. MACD


  9. MACD


    Appreciate that the question of "how difficult a subject is to learn" -- when applied to one's ability to Profit from the knowledge -- then how easy it is to learn, or how difficult and disciplined it is to apply -- should Not be the determining factor. If one could become proficient with a skill in say 100 hours of well planned study --then perhaps that would set them up for financial independence.
    Last edited: Aug 29, 2019
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  10. MACD


    "If it were easy -- then there would be No Money in it."
    #10     Aug 29, 2019
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