Will SSF's replace Options for hedging?

[def]

limit,
i read a few things this weekend and came across an interesting statistic that I thought you might find of interest....

in 2001 there were 636m units of single stock options traded in the US which is greater than the entire volume of all US futures (all types including financial and commodity).

 

[Pabst]

Originally posted by def
limit,
i read a few things this weekend and came across an interesting statistic that I thought you might find of interest....

in 2001 there were 636m units of single stock options traded in the US which is greater than the entire volume of all US futures (all types including financial and commodity).

Def; Get REAL!! How can you compare an OTM GE call with 1 Soybean futures contract. If you want an apples to apples comparison between futures volume and equity options volume you must multiply options by their delta and then calculate ATR's. (Notional value is useless since Eurodollar futures are a $1,000,000 contract with an ATR of about $125.00 per day. Eliminate QQQ volume (there is no options contract on NQ which hugely inflates QQQ opts. volume) and you will see that equity options are NOT doing very well. Except for CSCO, INTL,and MSFT, trades are by "invitation" only.

 

[def]

i was just quoting a stat that i ran across that I throught was of interest. Sure, it doesn't compare $ values but it was suprising to me.

 

[Pabst]

Def: By the way, didn't mean to beat on you in my last post. I'm a loyal IB cust. and find your help and input most useful. Here in Chicago we want SSF's to succeed but are not hopeful. Don't see much compelling institutional need for the contracts. Great vehicle for retail but but IMO it will be a bucket shop. Pay a nickle over fair value for the privilege of the leverage. Futures work best when there is an under developed central pricing mechanism in the underlying. Hard to "tighten up" most NASD issues.

 

[def]

you were right to point it out, no offense was taken.
the gist of the article (FOW magazine) was that the stock futures have an uphill battle. margin, taxes, two regulators, and some other issues don't make them a compelling reason to trade them when comparing to options. The big advantage in the US will be the downtick rule and margin when compared to stocks. Time will tell.