Swing Trading: Futures vs Options
Hi.
I'm thinking of holding my postions a bit longer (eg a few days to several weeks) to improve my trade, so I would like to involve in some swing or short-term position trading.
Which instrument, future or option, is better for a swing trader? My criteria are based on risks, rewards & capital utilization.
I trade Hong Kong Hang Seng Index. The market opens only in the morning (session 1) and early afternoon (session 2). There's always an opening gap each day.
Future:
- tight spread(eg 1-2pips)
- require margin
- unlimited risks but you can always control your risks by stop orders
- more rewards since every pip you gain will get into your pocket
Options:
- wider spread(eg can be about 10 pips wide ocassionally)
- require margin only if you sell call/put
- max. risk is fixed for call/put buyer
- you need to pay premium, so you can only gain after your gain can offset your premium
Any advice?
Note: Even if you know nothing about Hong Kong Hang Seng Index, you can still give advice based on your general knowledge about futures and options. Thank you!
Hi.
I'm thinking of holding my postions a bit longer (eg a few days to several weeks) to improve my trade, so I would like to involve in some swing or short-term position trading.
Which instrument, future or option, is better for a swing trader? My criteria are based on risks, rewards & capital utilization.
I trade Hong Kong Hang Seng Index. The market opens only in the morning (session 1) and early afternoon (session 2). There's always an opening gap each day.
Future:
- tight spread(eg 1-2pips)
- require margin
- unlimited risks but you can always control your risks by stop orders
- more rewards since every pip you gain will get into your pocket
Options:
- wider spread(eg can be about 10 pips wide ocassionally)
- require margin only if you sell call/put
- max. risk is fixed for call/put buyer
- you need to pay premium, so you can only gain after your gain can offset your premium
Any advice?
Note: Even if you know nothing about Hong Kong Hang Seng Index, you can still give advice based on your general knowledge about futures and options. Thank you!