Quote from ryank:
Continuing off topic on this holiday-
Learning about futures and options on futures are on my goal list for this year. I've heard of futures and know that the index futures give you some indication of how the markets are going to open but that is the extent of my knowledge. I think that some who have appeared on this board from time to time trade some futures and options on futures. Any good books for a beginner to read?
ryan
I don't know about books. But a good place to start learning about the futures market is Investopedia.com (
www.investopedia.com). I learn most of my trading information from that site, the fundamentals atleast.
I am trading options on futures right now. I feel that I have been more successful in trading options on the futures than I have on the equities side. I have done credit spreads only on big S&P contract ($250/pt.). The big advantage to doing credit spreads on futures is because of the SPAN margin. The strike difference between your long and short leg don't have to be equal, on both your call spread and your put spread. (Did that make sense,lol.)
You can also put hedges using the mini S&P (ES) ($50/pt) futures options. You could alternatively just put on credit spreads on the ES contract, but the only drawback on that is, that you can't enter spread orders. Since it is electronic, you can only leg in your positions, which becomes a pain, atleast in my experience.
But be warned, that trading options on futures carries a little more risk than trading options on equities. Since, you can lose more money than you first invested. Also, due to the SPAN margin, your margin requirements change everday depending on the volatility of the index and where it closes.
Learn and understand everything you can about the futures market before trading real money with options on futures.
I hope most of this has made sense, and has helped you.
Good luck!
