Most suitable instrument to use in my situation - Trading indexes

T

tradertt

Hi Guys,

I am facing a problem here.

I actually would like to trade indexes but I want to hold for the long term.

I know I can use ETFs as an option but they do not provide me with much leverage.

I am currently purchasing Call options as they give me leverage but their expiry date is always 3 months to 6 months and the time decay is very high.

Considering Futures but wonder what happens after the futures expires? Does it roll over to a new future contract?
Is there time decay in futures?

Are there any other instruments I can consider using too?

Thank you
 
Most obvious choice would be the two-times ETFs, like Pro funds QLD or SSO. I think you can buy them on margin, so you could get four times leverage, although I would not advise that.
 
Quote from tradertt:

Hi Guys,

I am facing a problem here.

I actually would like to trade indexes but I want to hold for the long term.

I know I can use ETFs as an option but they do not provide me with much leverage.

I am currently purchasing Call options as they give me leverage but their expiry date is always 3 months to 6 months and the time decay is very high.

Considering Futures but wonder what happens after the futures expires? Does it roll over to a new future contract?
Is there time decay in futures?

Are there any other instruments I can consider using too?

Thank you
More...

Ultra Short Pro Shares ?

Anek
 
Quote from tradertt:

Hi Guys,

I am facing a problem here.

I actually would like to trade indexes but I want to hold for the long term.

I know I can use ETFs as an option but they do not provide me with much leverage.

I am currently purchasing Call options as they give me leverage but their expiry date is always 3 months to 6 months and the time decay is very high.

Considering Futures but wonder what happens after the futures expires? Does it roll over to a new future contract?
Is there time decay in futures?

Are there any other instruments I can consider using too?

Thank you
More...
You can use leveraged (2X) ETFs.

Futures often (but not always) have a slight "time decay" about 5% per year, search Contango and Backwardation.

When futures expire, they are settled into cash. You have to roll them manually, is isn't a big deal.

You may consider selling ETF LEAP put options.
 
Hi guys, as I am from Singapore. Where can I get most of the instruments mentioned? Interactive brokers? Possible?

Futures, if the time decay cost of 5% pa thhat may be equal to my cost of margin interest too
 
You must log in or register to reply here.
Back
Top