Options on Futures

[FX-Trader]

Options on Index S&P100 --- > www.cboe.com/micro/oex/index.asp

What I actually trade is OEX Index Options (CBOE).
The above products based on SPX were just for illustration.

 

[savage]

What's the multiplier on OEX options?



Also, I have a quote on an ES put at 86.50
How much $$ is required to make that trade?

 

[chisel]

Originally posted by savage
So what then is the fundamental difference between trading futures options vs index options??

For futures options, the call and put are the same price when the underlying is at the strike. E.g., if the underlying is 80 then the 80 call and 80 put are the same price. This is not the case with equity options. For futures, there's no dividend and no cost of carry.

 

[J-Law]

Plenty of people trade them. The advantage is the ability to construct a defined risk profile. Say you feel crude oil is too high but don't want to short the futures because of war worries. You could buy puts on the futures or sell a call spread,etc. Make sure you understand the pricing and expiration cycles before you get involved though, as they are not intuitive.

AAA,

Simple question. In regard to the synthetic short you mentioned for crude. How is that different from a outright short in the underlying other than you now have a two leg position ??

What are the benefits over a short future ??

J-Law