Hey thanks for reading my thread. Check what I wrote in post #9.
Synthetic Futures Spreads
- Thread starter Real Money
- Start date
wont work well enough unless you can account for all that slippage! on everytrade
I think you missed my point...
Long call and short put is not same as long and short futures trading a relative spread.
If you are long a call and short a put BOTH make money if market goes up. BOTH lose.money of market goes down. This is a pure bullish position.
Long a future/short a future is a relative value that profits if spread widens.
Not the same thing at all.
Long call and short put is not same as long and short futures trading a relative spread.
If you are long a call and short a put BOTH make money if market goes up. BOTH lose.money of market goes down. This is a pure bullish position.
Long a future/short a future is a relative value that profits if spread widens.
Not the same thing at all.
i think we get your point. traders mix up buying n selling puts all the time. especially when reading a blog on a 2x3 inch fing screen. but thanks for the explanation or short puts or writing puts or granting puts..got it. lol
I think you misunderstood my post #9. I said
would replicate the payoff from the futures spread given the right ratios. However, the point above by REDP1800 is well recieved. On second thought, the fills and commissions would eat you alive trying to do this. Thanks guys.
Sorry missed that post. Yes spreads and commissions would make it inefficient of course. Futures always better but you can look into adding futures options to your position for additional hedging or income maybe but overall modeling the spread is all you need.