Trouble Choosing Between Futures and Options

Discussion in 'Trading' started by gaussian, May 21, 2019.

  1. gaussian

    gaussian

    For options I quite literally follow an insurance company style approach. I have written some stuff to help me identify severe mispricings - typically around binary events. I then evaluate probabilities, choose a trade type (condor, butterfly, etc), purchase units as "reinsurance" for black swans and move on. My typical holding period is 3-10 days. It definitely feels "boring" at times. The reason being, I know the law of averages is the only way to take advantage of an edge. I feel like I don't get enough trades in with options because my holding period is too long.
     
    #21     May 22, 2019
    tommcginnis likes this.
  2. bone

    bone

    Are you a full time, dedicated professional trader ? I ask for a constructive reason.
     
    #22     May 22, 2019
  3. gaussian

    gaussian

    No, I can't afford to be right now unfortunately. This is mostly a very serious hobby for me.
     
    #23     May 22, 2019
  4. bone

    bone

    And that is just fine. I kept my full time day job as a Nuclear Engineer and traded the evening CBoT Pit session and night Project A and Globex electronic sessions. And I carried futures spread positions for days and sometimes weeks.

    This is just my own opinion, enforced by working with over 200 clients - my advice would be to stay with the 3 to 10 day holding period and options.

    Just keep grinding it out and building account capital. If you have a conservative, modest sizing plan and you are responsible in terms of position management - you can really build that up.

    I wish you continued success and good fortune. Grind it out.
     
    Last edited: May 22, 2019
    #24     May 22, 2019
    tommcginnis likes this.
  5. futures are great except when you get the certain 10 consecutive losing trades- all directional trading is a punt and you will have a terrible losing streak-just the stats.
     
    #25     May 25, 2019
  6. ironchef

    ironchef

    I am impressed, Nuclear Engineer, part time trader and you are an ET sponsor with 200+ clients! :thumbsup:
     
    #26     May 25, 2019
  7. "Options ... Cons ... Margin is actually"

    True for Reg-T margin. You might look into portfolio margining (PM).
     
    #27     May 26, 2019
  8. Overnight

    Overnight

    Can't you have 10 consecutive losing trades with options, too?
     
    #28     May 26, 2019
  9. Never heard of that- naked put sellers will only have one,then they'll be moving back in with mum! However traders need to learn that systems do this. I beta tested a system that managed about 14 consecutive losers-people paid for it too
     
    #29     Jun 1, 2019