Reasons not to use conditional orders based upon underlying?

Discussion in 'Options' started by goofy, Oct 13, 2019.

  1. gaussian

    gaussian

    Your greeks could change dramatically. Trading options as a proxy for stock (delta 1) is a good way to lose a lot of cash. You need to be aware of the underlying conditions AND the greeks of the options in order to trade intelligently.
     
    #11     Oct 13, 2019
  2. goofy

    goofy

    I understand. I think I would be better suited to trading (short term) on futures. However, it seems you need very large capital to do that. I only have low 5 figures available for trading. And it seems difficult to get significant leverage without a 6 figure account. I.e. trading with a 100k balance with a 10k net worth. I am used to this from the crypto trading where you can get large leverage on anything and thus not need to put your entire net worth into one spot.
     
    #12     Oct 13, 2019
  3. gaussian

    gaussian

    With 15-20k you can start trading single contracts of most futures and they provide significant leverage per dollar margin.
     
    #13     Oct 13, 2019
  4. goofy

    goofy

    I will look into this. Ideally if I could have 15k on a broker and utilize appropriate risk(1%/trade).

    I.e. if I had a 50k net worth, 20k on the exchange, open a 100k usd long position on ES with a stop .5% from my entry. Without getting destroyed by margin lending fees. That I would be interested in.
     
    #14     Oct 13, 2019
  5. Overnight

    Overnight

    Do not think of it in notional value. You must think only in terms of the performance bond requirement of the exchange.
     
    #15     Oct 14, 2019