the most liquid and tightest spread on futures options is...

Discussion in 'Options' started by increasenow, Aug 14, 2008.

  1. crude oil
    mini sp
    cme globex euro
    ecbot Tbond and 10 year...others?..I can only call in futures options orders through my broker...agree and thoughts?
  2. You may consider the Options on the equivalent ETFs, e.g.
    USO (crude)
  3. dmo


    CME Eurodollar options, hands down.

    T-bond and t-note options trade electronically, but in some cases (back months, certain spreads) you may get a better fill through the pit.
  4. thanks...but...all my cash is in my futures only futures...
  5. yea but don't you find it would take "forever" for the Eurodollar options to make a profit...because the Eurodollar futures hardly ever move in a big way...would have to wait some big time for a Eurodollar option profit...correct??
  6. dmo


    Yeah, if it's wild volatility you crave, the ED won't do it for you. The volatility isn't as low as it seems though - that low volatility is actually something of an illusion based on the fact people assume that the underlying price on which if the ED contract is based is the price of the futures. It's not - it's 100 minus the futures price.

    In other words, the ED contract represents an interest rate - 100 minus the futures contract. So if the ED is at 97, that represents an interest rate of 3%. A 96 put is REALLY a 4 call. A 98 call is REALLY a 2 put. If you don't calculate it that way, your calculations will be completely wrong.

    Today the Sep ED settled at what - 97.15? That means it REALLY settled at 2.85. If you look at the movement of the contract as a percentage of 2.85 rather than 97.15, the volatility isn't as bad as it initially looks.
  7. Funny how I was just curious about this question myself just today. I've traded options on and off over the years and recently have been exploring utilizing some of the various spread methods I've used successfully in stock options in the futures options.

    So, to continue this discussion, any links to articles on this? I see volume and bid/ask spreads making this a deal breaker for me, at least with bonds.

    Bottom line did anyone trade the ZB or ZN futures options today successfully? I ask as days like today in the ZB/ZN futures are my bread and butter. It would be nice to have the "option" (ha, ha) of letting an option strategy based trade ride for a day or two or longer.

    I have an hourly system that has been nailing 1 - 2 point moves like clockwork in the ZB/ZN but I don't trade it directly. I trade around it intra-day. What I would like to do is incorporate a second strategy in options to take advantage of a longer holding time.

    Any thoughts, ideas, comments or suggestions on bond future option strategies for my hourly system are welcome.
  8. dmo


    Will your futures firm let you speak directly with a broker in the options pit, and put orders in that way? That's probably the only way to get reasonably good fills on most spreads in bond and note options.
  9. I use IB. I don't know for sure. I haven't had to phone an order in for several years. I can tolerate a bit of bid/ask spread so phoning in an order is not a big priority. I realize things are not going to be as tight as my futures entries and exits but I'll allow for that in return for a trade I can walk away from for one to several days.
  10. while we're at it, does anyone know where i can get options chains that include EOD bid-ask AND greeks (well, at least deltas) for FOPs such as ES and YM? I have tried the OIC and the exchange (CME ) . both said sorry, we don't have this data available. :(
    #10     Aug 15, 2008