Just my 2c, but I was all hot and bothered for a bit on trying to find out info on options on futures, applying the same strategy we do here. What I found was that the major brokerage that trades them, IB, isn't very good for the people who like the trading platforms of OX and TOS. That's about as far as I got into it since if I can't trade via the web, I really can't trade. I believe there was one or two other brokerages as well that trade options on futures, but to me, the retail investor, there wasn't a good source of info or platform to make it viaable. Start at the CME for your education. sd
I don't know about books. But a good place to start learning about the futures market is Investopedia.com (www.investopedia.com). I learn most of my trading information from that site, the fundamentals atleast. I am trading options on futures right now. I feel that I have been more successful in trading options on the futures than I have on the equities side. I have done credit spreads only on big S&P contract ($250/pt.). The big advantage to doing credit spreads on futures is because of the SPAN margin. The strike difference between your long and short leg don't have to be equal, on both your call spread and your put spread. (Did that make sense,lol.) You can also put hedges using the mini S&P (ES) ($50/pt) futures options. You could alternatively just put on credit spreads on the ES contract, but the only drawback on that is, that you can't enter spread orders. Since it is electronic, you can only leg in your positions, which becomes a pain, atleast in my experience. But be warned, that trading options on futures carries a little more risk than trading options on equities. Since, you can lose more money than you first invested. Also, due to the SPAN margin, your margin requirements change everday depending on the volatility of the index and where it closes. Learn and understand everything you can about the futures market before trading real money with options on futures. I hope most of this has made sense, and has helped you. Good luck!
I while back I studied up on futures and options on futures. In the end I stopped because I really couldn't see a major advantage to it. I originally started looking into it because of the publicity. Now I wish I had spent my time on something else, because it didn't really suggest to me a better way to trade. IMHO, some things are created simply because they can be, not because they ought to be. This might just be an example of that. But go right ahead and dive in. I hope you find something better than I did.
True it is a completely different market and is a wilder ride but for some the benefits are much greater than the equity side. Electronically traded options on the mini is seeing volume steadily pick up. Summa and Lubow wrote "Options on Futures". This might be good.
Yes, that is definitely do-able with the RUT. Especially if the VIX picks up a bit. It took me a while to get used to the RUT cuz it doesn't correlate well to the S&P (which can be a good thing). It tends to move in similiar directions to the NDQ.
I, also, do iron condors on the RUT, along with the SPX and OEX. For January I have the 620/610 puts and 740/750 calls. So far , so good. DAVE
Congrats Dave. You're a better man than I am. I have 630/620 and bot back my 720/730 at a small loss.
Speaking of taxes....... 2005 was the first year I traded credit spreads. I'll start with a simple question. Do I have to list every leg of each trade on my tax return?