Does anyone know what are the best options on stock indexes to trade that have the best leverage ? For example options on the ETFs : QQQ , SPY or DIA ? Which one is better ; moves better with the market ? Or are they all pretty much the same ? It seems that they are a little different . Are there any options that are better than the QQQ , SPY or DIA that I am not aware of ?
"best" ? Are you looking for the most alpha? I would focus on SPX because of the tax advantage. Also, RUT. If the markets are too wide for you , stick with SPY and IWM. Or, learn to trade ES futures. 1245
by best I mean most profit potential over one to two month expiration . maybe some are more expensive to purchase ? I don't know ; I am just asking . Maybe you have experience with which is better . I will look at RUT and IWM ; haven't looked at those before . Thanks .
If you are going to day trade or short term trade, the cash settled options have wide spreads and more difficult to learn to trade, but have better tax treatments. The ETF is more liquid and easier to get in and out. I would try SPX and RUT for position trading and SPY and IWM for scalping. AAPL is another good option to trade. A lot of customer flow. Good Luck....1245
1) ? ..... I believe the name for that is "lambda", i.e. the percent change in the option premium compared to the percent change in the price of the underlying and maximizing it. 2) You would tend to want to have an opinion of what the underlying will do and then position yourself in those out-of-the-money strike prices for maximum bang for buck, not too close nor too far away.