Huh? FX moves in small percentages? Dude, a 2% move will blow out 100% of your account in a single day!!!! A 2% move in your favor will double your account in a single day. LOL.
Percent Profit: Weekly Options vs. Futures vs. Futures Options
- Thread starter Wait4proof
- Start date
Huh? FX moves in small percentages? Dude, a 2% move will blow out 100% of your account in a single day!!!! A 2% move in your favor will double your account in a single day. LOL.
Multiply an average percentage move by the leverage you get. So 50:1 for FX and what, 10:1 for futures?
UPDATE:
I've spent a week learning Forex and toying with Oanda's fxTrade Practice platform. Here is some of my conclusions:
1. Weekly Options is no doubt the winner (in the short term)
a) it feels to me around 2 to 3 times more powerful than FX
2. but 50:1 Forex is a very good alternative (especially longer term):
a) no expiration dates
b) no retard Black-Scholes spreadsheets (a.k.a. toilet paper)
i. no guessing price of Limit orders
ii. no guessing potential profits
c) no waiting for the market to open
d) no CBOE morning quote manipulation
e) no day-trader rule (although I rarely day-trader anyway)
f) a VERY HUGE market liquidity, wow
g) reasonable "commissions" in the spreads
All in all, I will gladly be trading Forex (probably USD/JPY) once the learning is over. Until then, I will continue to focus on Weeklies including the SPX. Then I will be splitting my account into two: the primary for Forex swing-trades and the secondary for occasional Weeklies.
I actually look forward to that day, but everything in due time.
Thanks everyone for the input.
I've spent a week learning Forex and toying with Oanda's fxTrade Practice platform. Here is some of my conclusions:
1. Weekly Options is no doubt the winner (in the short term)
a) it feels to me around 2 to 3 times more powerful than FX
2. but 50:1 Forex is a very good alternative (especially longer term):
a) no expiration dates
b) no retard Black-Scholes spreadsheets (a.k.a. toilet paper)
i. no guessing price of Limit orders
ii. no guessing potential profits
c) no waiting for the market to open
d) no CBOE morning quote manipulation
e) no day-trader rule (although I rarely day-trader anyway)
f) a VERY HUGE market liquidity, wow
g) reasonable "commissions" in the spreads
All in all, I will gladly be trading Forex (probably USD/JPY) once the learning is over. Until then, I will continue to focus on Weeklies including the SPX. Then I will be splitting my account into two: the primary for Forex swing-trades and the secondary for occasional Weeklies.
I actually look forward to that day, but everything in due time.
Thanks everyone for the input.
It depends what your focus is.
Weekly options have more gamma/theta exposure.
Longer dated are more vega sensitive.
Neither has any edge wrt. the difference in gamma/theta, because longer dated have both less gamma and less theta. Shorter dated more gamma and more theta. The two 'counteract' eachother. No edge.
Like retail has access to "world liquidity"? Your broker is the limiting factor, always will be. In reality, your broker has maybe 1-2% of this liquidity accessable.
Weekly options have more gamma/theta exposure.
Longer dated are more vega sensitive.
Neither has any edge wrt. the difference in gamma/theta, because longer dated have both less gamma and less theta. Shorter dated more gamma and more theta. The two 'counteract' eachother. No edge.
Like retail has access to "world liquidity"? Your broker is the limiting factor, always will be. In reality, your broker has maybe 1-2% of this liquidity accessable.
"Experience without theory is blind, but theory without experience is mere intellectual play." ~ Immanuel Kant
My knowledge of Weeklies makes me money.
Your knowledge of Weeklies makes you feel smart.
We both make a choice to satisfy our own egos.
From reading your first post, your trading is gamma oriented thus obviously you would make more money with weeklies than with further out options.... The gamma/theta relationship is well established, so it's not just theory like you claim. I bet your portfolio volatility reflects this very well if you were to compare it to the volatility of a portfolio using further out options...Just sayin
Once again, a very bookish comment. But that's okay. You can believe that the Greeks are well established. And I can believe that the Greeks are crap. We are all free to believe what we want. I would just like to point out that you are the one to "claim" that there is "No Edge" to weeklies based on your belief in the Greeks... Just sayin.
Like I mentioned in another thread, I know of a very good options trader who doesn't care about the greeks because he's very good at predicting price direction and can judge based on experience whether an option is cheap or dear.Quote from Look4aSine:
Once again, a very bookish comment. But that's okay. You can believe that the Greeks are well established. And I can believe that the Greeks are crap. We are all free to believe what we want. I would just like to point out that you are the one to "claim" that there is "No Edge" to weeklies based on your belief in the Greeks... Just sayin.
Quote from Look4aSine:
Once again, a very bookish comment. But that's okay. You can believe that the Greeks are well established. And I can believe that the Greeks are crap. We are all free to believe what we want. I would just like to point out that you are the one to "claim" that there is "No Edge" to weeklies based on your belief in the Greeks... Just sayin.
You're the one asking for input, yet when you get it, you disregard it as crap. Not sure what the point of this thread is, considering you obviously made up your mind before starting it. Just making conversation maybe?
Anyways, weekly future options with SPAN margining (ES, NQ etc) give you the best leverage. MMs are pretty friendly on these and will often fill you at near midpoint for most trades including spreads etc etc. However, again, risk-adjusted return, portfolio vo...ah whats the point. Good luck in your trading adventures