help finding a product i can train
- Thread starter met1989
- Start date
thanks
Robert Morse
Sponsor
Can you please ask the question in a different way and be more specific.
Are you looking for a Future with options where the contract size is smaller or an option on a future where the cost is lower to trade?
Since Futures are intended to have a lot of leverage maybe you should look to an ETF like SPY. You can trade option on SPY with the smaller size and then move into futures or SPX later.
@Robert Morse thank you for alwyas taking time to answer.
i trade the ES future contract which i assume in the trading world has a delta of 1 cause it always ticks in 50 and i use for protection a-future option that protects that postion that is my base line that i work with im but for such trading you need at least 10 k for sure im asking is there anyway to have a product that is similar to the ES but costs much less( obviously the leverage is smaller, but just to get the touch of the market) and as well have at the same time have an option for protacting the postion
is this better ? @Robert Morse @Visaria
Robert Morse
Sponsor
Yes, this is better.
It sound like your only solution with the goal to be long ES and be protected is to just buy a call vs long ES and long put as a hedge. This should require a lower dollar amount for margin. You can regulated your delta with what option you buy and avoid a lot of decay with longer dated options. You can do the same to bet the downside with just a put. That way each 1 point move in ES would not change your Call or Put by $50 as the option would move slower. E.G. buy 1 call with a 50D, each point would be about $25 in risk over a short period.
I'm not aware of any CME financial future smaller than the ES that replicates the ES with a smaller contract. If there were, I would not recommend trading the smaller contract as they tend to cost more the trade with wider markets and higher fees per $.
It sound like your only solution with the goal to be long ES and be protected is to just buy a call vs long ES and long put as a hedge. This should require a lower dollar amount for margin. You can regulated your delta with what option you buy and avoid a lot of decay with longer dated options. You can do the same to bet the downside with just a put. That way each 1 point move in ES would not change your Call or Put by $50 as the option would move slower. E.G. buy 1 call with a 50D, each point would be about $25 in risk over a short period.
I'm not aware of any CME financial future smaller than the ES that replicates the ES with a smaller contract. If there were, I would not recommend trading the smaller contract as they tend to cost more the trade with wider markets and higher fees per $.
Why? How is that going to help him trade?
but if i buy 1 spy and 1 spy option there is no hedge between them cause the spy future is 100* the spy no?
Robert Morse
Sponsor
I suggested you trade just the ES options without the Future. There is no SPY future, it is an ETF (Equity). The point is that if you just trade the option, your risk/P/L will be similar with a smaller margin requirement and you can reduce the per point risk with lower delta options,
500 Share of SPY=1 ES Future so the risk size is much less on SPY.