Futures Question?

[optionable]

Does anyone sell options to get into a futures position?

I have met some people who sell stock options to get into a stock, if they get called that is, but have never met anyone who does this on futures.

If someone does this or knows of this strategy, could you please elaborate on how this is similar/dissimilar to doing this with futures as opposed to stocks?

Thanks!

 

[nazzdack]

Quote from optionable:
Does anyone sell options to get into a futures position?

1) Speculative users would tend to avoid it because of the leverage with futures compared to that with stocks and a desire to avoid delivery issues with the underlying commodity.
2) Commercial users would be better qualified to short-sell option premium to reduce their cost basis or generate additional revenue with an underlying commodity that they actually deal with.

 

[tomk96]

if you did this with index futures, you could only do it in the serial months. the quarterly options expire into futures, which expire into cash.

 

[Spike Trader]

Quote from optionable:

Does anyone sell options to get into a futures position?

Its one of the simplest ways to make money in markets. You sell Index Options and cover with Index Futures if required to. You would need to know your Delta and the Hedge Ratio.

 

[Spike Trader]

Or , if i understand your question more correctly....Buy a call and sell a put ....at the same strike price (ie. buy a call / sell a put )equals a Synthetic Long Futures position. hope that helps.

 

[NHS]

Quote from Spiker:

You sell Index Options and cover with Index Futures if required to.

How does this work?

ATM

sell 100 call and buy 200 long futures?

 

[FredBloggs]

Quote from Spiker:

Quote from optionable:

Does anyone sell options to get into a futures position?

Its one of the simplest ways to make money in markets. You sell Index Options and cover with Index Futures if required to. You would need to know your Delta and the Hedge Ratio.

the delta is the hedge ratio