Pro's & Con's to buying Index Futures with further out Expiration?
- Thread starter sjain100
- Start date
I don't mean to hurt your feelings, but your notion is ridiculous.
If you want a long-term play, look for something like LEAPs.
If you want a long-term play, look for something like LEAPs.
CannonTrading_Ilan
Sponsor
I prefer front month for volume and liquidity. Easy and cheap to rollover when time comes.
The only advantage a further month gives you is, as you said, the time edge for swing trading with gigantor stops (or none at all), and doing a roll play (My current track). For shorter-term trading, there is zero reason to not trade the front month, else you get sucked up in wider bid-ask spreads, especially in equities.
Crude is about the only contract I can think of where you could try to day trade father out short term, because the liquidity is there for many months along the chain. But since they move in the same direction, why bother? Stick with the front month for short-term trading/scalping.
Futures contracts were designed and intended as "hedging instruments"... hence the high leverage. They welcome speculators like us into the market to broaden it and improve liquidity. In no way is a "long dated" futures contract appropriate for anything except losing money... and likely a whole LOT of it... especially if your broker doesn't keep close tabs on your margin requirements.
They have a high leverage and it seems pretty risky so be careful.