Options vs. Futures, what's better?
- Thread starter stv17
- Start date
Robert Morse
Sponsor
Derivatives are never "easier" to trade. They require more knowledge.
I don't think there is anything "easy" about either of them.
In equities, you get 2:1 leverage.
In derivatives, you get 50:1, 100:1, 1000:1, and what's oil??
That's what you want to focus on, first: leverage.
Riskier? Less Risky? More reward? These things all balance reward against risk.
If you have an equity position on that changes 1.0% today, you'll notice -- maybe.
If you have a derivatives position on, that changes by 1%? Woof! You'll notice, alright.
All that said, futures (to my eyeballs) don't trade all that different than equities.
Options, though -- being insurance on the downside and on the upside -- are a wholly different animule -- even to the point of being *unrelated*. Look up "synthetic position" -- that's an option position that trades like an equity AND has a time-decay component, too. That's about as simple as option trading gets. From there, things get 3-4-dimensional fast. KNOW YOUR RISK GRAPHS.
In derivatives, you get 50:1, 100:1, 1000:1, and what's oil??
That's what you want to focus on, first: leverage.
Riskier? Less Risky? More reward? These things all balance reward against risk.
If you have an equity position on that changes 1.0% today, you'll notice -- maybe.
If you have a derivatives position on, that changes by 1%? Woof! You'll notice, alright.
All that said, futures (to my eyeballs) don't trade all that different than equities.
Options, though -- being insurance on the downside and on the upside -- are a wholly different animule -- even to the point of being *unrelated*. Look up "synthetic position" -- that's an option position that trades like an equity AND has a time-decay component, too. That's about as simple as option trading gets. From there, things get 3-4-dimensional fast. KNOW YOUR RISK GRAPHS.
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Appreciate that the question of "how difficult a subject is to learn" -- when applied to one's ability to Profit from the knowledge -- then how easy it is to learn, or how difficult and disciplined it is to apply -- should Not be the determining factor. If one could become proficient with a skill in say 100 hours of well planned study --then perhaps that would set them up for financial independence.
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