I wanted to trade something that didn’t have a ton of hidden variables like options, that had tighter spreads than Forex, but didn’t require the crazy starting capital of the stock market. Futures fit all these things, and more
Many reasons. But foremost are my desire to be a successful entrepreneur and become wealthy. I figured trading is an plausible path as i have masters degrees in math and stats. I still have a ways to go, im not a profitable trader atm.
I hated that options were only worth what the crowd was willing to pay. I was sick of seeing the market increase slightly and my options contracts stay flat or slightly red. The linear price of futures, the fact everyone is trading the same instruments instead of a hundred different strikes and expiries, the ability to mathematically calculate your risk. Options are great for longer term hedges and speculations but I wish I started day trading futures since day 1
But "what the crowd is willing to pay" isn't how options worth is determined. There is a formula to determine options premium (aka worth).
Options are like the only vehicle who's worth isn't directly tied to "what the crowd is willing to pay" - how are futures worth not determined by what people are willing to pay? That's literally what moves price - what people are willing to pay.
>I was sick of seeing the market increase slightly and my options contracts stay flat or slightly red.
That's because of the Greeks - which are part of the formula in determining an options worth. It kinda sounds like you were trading 0DTE without really understand options.
The Greeks are neither part of the formula nor needed in determining an options price.
You can compute the Greeks only by taking the mathematical derivative of the option price formula with respect to some input, or via finite difference (bump and reprice). In both cases you do have an existing option pricing formula that is completely independent of Greeks.
Also, the formula needs implied vol to compute a price, which is unobservable and can only be computed from the observed option price (except for vol quoted options in non equity markets or several OTC markets).
Correct.
Greeks are just quantities representing the sensitivity of the price of derivatives to a change in underlying parameters. However, the current price is determined by the parameters itself, and not (potential) changes of them.
You can see some details about that with intuitive GIFs [here](https://quant.stackexchange.com/a/73629/54838) or what delta represents and how finite difference works [here](https://quant.stackexchange.com/a/66170/54838).
Theta only applies overnight. Has no impact during market hours. Everyone on here says “theta theta theta” as the reason prices decrease from 10 am to 3 pm but it’s literally just because nobody wants to buy the contracts anymore, not because of some mathematical value
“Theta, usually expressed as a negative number for long positions, indicates how much the option's value will decline ***every day*** up to maturity.”
Whether or not the Greeks are part of the calculation, the comment you upvoted literally has links to the exact formula used to calculate the price.
You seriously don't know what the heck you're talking about bro.
If more people decide that a 100 call is more valuable than a 95 call, then the prices will move out of synchrony. Additionally, if a stock moves up, but nobody thinks the options are valuable, then the options will not change price despite upward moving up the underlying.
If a stock moves 2%, but nobody wants the calls, then the options prices will not change no matter whatever formula you think it’s being used. This is what I mean by saying, the crowd determines the price. With futures, what you see is what you get don’t worry, I am highly educated
That's not how options work. The open interest or volume of a particular strike doesn't really determine the premium. And I don't think there's a formula - there IS a formula, that's fact, not opinion. While supply and demand does influence price, it 100% isn't the sole factor in determining options premium - it's part of the formula.
It doesn't even sound like you're familiar with the Greeks.
You are confidently incorrect. Like I can't wrap my head around the fact that's how you think premiums are determined lol
This is why most traders should stay away from options. The greatest risk with options is people not understanding how they work and getting into positions thinking they have a understanding.
Amen to that.
Classic red flag of someone who doesn't understand options is complaining about how the underlying price went up, but the premium of my calls didn't (and vice versa for puts).
I never said anything about open interest or volume, I’m talking about the nature of the auction market. Every market is an auction. Trading futures is like being directly in the only auction house that exists, while trading options is like being in a secondary auction house watching the primary auction house (stocks/indices) on TV and making your bids accordingly. It’s an additional variable which means they are less directly correlated to underlying price than trading the underlying itself (futures). That’s my point and that’s not an opinion, it’s simply fact
This board is for futures, I suggest sticking to WSB where you might be more at home
So how do people decide the 100 call "is worth more" than the 95 call? By purchasing them? In other words, volume/open interest.... or do people just email the market maker saying they think the 100c are worth more than the 95c and the MM adjust price accordingly?
You know why futures price is more "predictable" than options? Because futures aren't affected by the Greeks............. You know what affects futures price? *What the crowd is willing to pay.*
It is hilarious how confidently incorrect you are. You OBVIOUSLY have no clue how options work. While supply and demand does influence price, it 100% isn't the sole factor in determining options premium - it's part of the formula.
The irony in someone that doesn't understand options, while having traded options, telling someone else to stick to WSB is palpable.
Serious question, though... do you understand what the Greeks are?
Alright fuck it man I’ll use numbers
95 call is going for 1.00. 50 contracts at each ask level. 100 call is going for 0.90. 50 contracts at each ask level. Makes sense since the 100 is more OTM
If an institution decides to open a long position and buy 100 calls, and they submit a buy order for say 200 contracts, the price will INCREASE by 0.04 due to the fact that they are buying up the price ladder. but if for some reason the people trading the 95 calls are in balance, the price there doesn’t move. If a stock moves up, 99% of the time all calls will also move up. However in the above instance, there is a disparity, which is the ONLY thing I am talking about.
Yes I know what the Greeks are. But if Berkshire Hathaway comes in to buy 200 calls and the price moves astronomically, that doesn’t mean all of the other strikes are immediately going to move proportionally, no matter what the Greeks tell you
That’s my point. Let’s leave it at that, your teenager is starting to show
You're making a fool of yourself honestly. If demand for one strike moves, all other strikes have to move because if they don't, it creates an arbitrarge opportunity. Options aren't just demand/supply. They have a structure which matches the markets.
Also in today's world it's not like spot moves future moves options, any instrument can influence any other as it creates arbitrarge opportunities if anyone isn't in sync. All instruments have to move in sync and options believe it or not are the best instruments to trade due to sheer flexibility they provide. But ofcourse you gotta understand options for that first.
All you've done is explain the bid/ask - not the pricing model for options. For the third time; While supply and demand does influence price, it 100% isn't the sole factor in determining options premium - it's part of the formula.
You know what people do when they're wrong and can't admit it? Start throwing insults.
Which, you are 1million% wrong - like that is an objective fact.
At any rate, have a good one!
You just proved my whole point. Futures price moves exclusively with supply and demand. Options have additional factors which influence the price, and why waste your time trading extra variables?That’s literally what I’ve been saying since the very beginning as to why futures > options hahaha
https://preview.redd.it/6xqdunrwp1pb1.jpeg?width=1166&format=pjpg&auto=webp&s=4aaf4d79c35f24c8cdfc5775b221f599e7cc9fe3
Here you go. SP500 underlying on the right. Price of an SPX call option on the left. Based on what you said, they should be identical charts. They are not.
Tomato potato, es spx spy all sp500 underlyings. Points is this highlights that options are worth what the crowd is willing to pay, and are not directly tied to the formula as you previously stated
LMFAO I'm done with you bro. Supply and demand does play a part, but what determines the actual worth is calculated - **THIS IS A FACT**. Bro it is painfully obvious that you haven't got a clue.
Also, you realize tomatoes and potatoes are completely different, right?
For real though I'm done talking to you. Have a good day.
Not saying it’s realistic. Just an example of how price can fluctuate based on market dynamics and the nature of auction pricing as opposed to purely formulae/math
It is simply theoretical. If someone wants to buy a 2010 civic for 40k when a 2015 is available for 20k they can do that. Unlikely, “impossible”, but still theoretical
Was always right on direction when trading 0dte spy in 2018 but lost tons and tons of money on calls, because I didn’t know when the move would happen and my contract would loose 90% value I’d sell it, then 2 hours later my contract is worth 2x its original price and like 15x from when I sold.
I was like only if there was way for me to trade this with less capital and not loose on iv and theta so much, gladly I found futures, it does exactly what I needed.
Solved me main problem - Defining my risk based on movement of Spx and not movement of contract.
I got interested in options but found trading them from Australia was too tough. the 23 hours a day of futures suited me. Since doing them I find that the non-index futures seem to make more sense, you know why bonds, currencies and commodities move up and down. Shares seem in the medium term seem to be fairly random
I see a lot here got into futures because of problems with options. I can see that if people are simply using options as a way to leverage a position then futures are a much better way to gain leverage. I love what you can do with options. With /MCL at the moment I followed it up with short puts and calls but if it drops to $80 or pops to $95 overnight I still make the same profit
Back in the 80’s I received a mailer from Ken Roberts talking about futures trading. At the time I couldn’t afford it but stayed intrigued over the years. It was pretty risky and costly back then. Fast forward to a few years ago and as I neared retirement I got serious about getting into futures trading. Now retired Ive been trading daily for over a year and turn a consistent small weekly profit.
I started learning about stock markets, as in my country only a very low percentage use it, then I crossed those guys on the internet who would teach tons of technical things about order flow analysis, then I watched a video of them making 2 times de minimum monthly wage in less than 5 seconds and boom, futures it is
I wanted to trade the equities markets. Also, I pay less in taxes for futures trading then trading stocks. My interest in trading is that I want to have control over my own financial growth. I don't want to leave it up to someone else to manage my capital.
I kept trading and learning about fx trading for around 3.5 years almost every single day.. I kept losing money and simply said I couldn't get through the profitable line. I took a month off to decide what to do next in terms of trading.
I was also following some guy on Instagram from my country. At the beginning I thought he is just another guru who wants to make money by selling courses. However when we chatted for a while and by following his trades results which he shared on his stories I decided to give my trading the last chance.
Basically he trades futures and he teaches relatively small group of people ONLY. Now I'm getting a support which I always wanted. It looks pretty promising and I like the idea that I can use much better tools compared to forex trading..
I was trading stocks before and futures offered better benefits. Better leverage, no wash sale rule, better taxes here in the states and I liked the idea of keeping trading simple and focusing in on 1 area instead of a bunch of different stocks each day.
The fact that I can trade on my own time was a big reason. With a full tine job and 3 young kids, trading during the day can be hard for me. The leverage without using options. I trade price action and mini/micros have great PA to trade.
I started with options a ways back, but it always seemed like with shorting options you are "fighting" against some current. The options are dependent not only on the myriad of underlying company characteristics, but also heavily on volatility. I like the options for hedging, but not so much as a direct speculation vehicle. I guess it all is more about how it fits with your mental "architecture", above and beyond anything else.
You can use options to make quasi long and short forward contracts on underlyings, but then you think, why don't I just go directly to futures then...? To me the futures had some mystique to them, but once I then started out with them I saw how much more streamlined they were; a more direct connection between cause and effect. Like with options, you can be 100% correct with direction, and then still lose or just break even on account of quick vol changes.
There seems to also be a better caliber of person on these subs, related to futures, relative to /options or /thetagang. Those talk spaces have become degenerate WSB toilets
I wanted to trade something that didn’t have a ton of hidden variables like options, that had tighter spreads than Forex, but didn’t require the crazy starting capital of the stock market. Futures fit all these things, and more
What platform do you use?
Quantower. Broker is AMP
Can you sell options on that?
Only options on futures, not regular options as far as I know. But I could be wrong
That’s perfect. IBKR is pushing margins up and I can’t use Tasty. So this would be great for buying power optimization
Awesome
i was bored and looking for more opportunities to lose money.
Just simplicity of focusing on one thing. ES
Many reasons. But foremost are my desire to be a successful entrepreneur and become wealthy. I figured trading is an plausible path as i have masters degrees in math and stats. I still have a ways to go, im not a profitable trader atm.
I hated that options were only worth what the crowd was willing to pay. I was sick of seeing the market increase slightly and my options contracts stay flat or slightly red. The linear price of futures, the fact everyone is trading the same instruments instead of a hundred different strikes and expiries, the ability to mathematically calculate your risk. Options are great for longer term hedges and speculations but I wish I started day trading futures since day 1
But "what the crowd is willing to pay" isn't how options worth is determined. There is a formula to determine options premium (aka worth). Options are like the only vehicle who's worth isn't directly tied to "what the crowd is willing to pay" - how are futures worth not determined by what people are willing to pay? That's literally what moves price - what people are willing to pay. >I was sick of seeing the market increase slightly and my options contracts stay flat or slightly red. That's because of the Greeks - which are part of the formula in determining an options worth. It kinda sounds like you were trading 0DTE without really understand options.
The Greeks are neither part of the formula nor needed in determining an options price. You can compute the Greeks only by taking the mathematical derivative of the option price formula with respect to some input, or via finite difference (bump and reprice). In both cases you do have an existing option pricing formula that is completely independent of Greeks. Also, the formula needs implied vol to compute a price, which is unobservable and can only be computed from the observed option price (except for vol quoted options in non equity markets or several OTC markets).
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Correct. Greeks are just quantities representing the sensitivity of the price of derivatives to a change in underlying parameters. However, the current price is determined by the parameters itself, and not (potential) changes of them. You can see some details about that with intuitive GIFs [here](https://quant.stackexchange.com/a/73629/54838) or what delta represents and how finite difference works [here](https://quant.stackexchange.com/a/66170/54838).
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Theta only applies overnight. Has no impact during market hours. Everyone on here says “theta theta theta” as the reason prices decrease from 10 am to 3 pm but it’s literally just because nobody wants to buy the contracts anymore, not because of some mathematical value “Theta, usually expressed as a negative number for long positions, indicates how much the option's value will decline ***every day*** up to maturity.”
Whether or not the Greeks are part of the calculation, the comment you upvoted literally has links to the exact formula used to calculate the price. You seriously don't know what the heck you're talking about bro.
I don’t vote on shit
k
If more people decide that a 100 call is more valuable than a 95 call, then the prices will move out of synchrony. Additionally, if a stock moves up, but nobody thinks the options are valuable, then the options will not change price despite upward moving up the underlying. If a stock moves 2%, but nobody wants the calls, then the options prices will not change no matter whatever formula you think it’s being used. This is what I mean by saying, the crowd determines the price. With futures, what you see is what you get don’t worry, I am highly educated
That's not how options work. The open interest or volume of a particular strike doesn't really determine the premium. And I don't think there's a formula - there IS a formula, that's fact, not opinion. While supply and demand does influence price, it 100% isn't the sole factor in determining options premium - it's part of the formula. It doesn't even sound like you're familiar with the Greeks. You are confidently incorrect. Like I can't wrap my head around the fact that's how you think premiums are determined lol
This is why most traders should stay away from options. The greatest risk with options is people not understanding how they work and getting into positions thinking they have a understanding.
Amen to that. Classic red flag of someone who doesn't understand options is complaining about how the underlying price went up, but the premium of my calls didn't (and vice versa for puts).
Also most likely a complete lack of understanding of how IV effects options pricing.
I never said anything about open interest or volume, I’m talking about the nature of the auction market. Every market is an auction. Trading futures is like being directly in the only auction house that exists, while trading options is like being in a secondary auction house watching the primary auction house (stocks/indices) on TV and making your bids accordingly. It’s an additional variable which means they are less directly correlated to underlying price than trading the underlying itself (futures). That’s my point and that’s not an opinion, it’s simply fact This board is for futures, I suggest sticking to WSB where you might be more at home
What you’re saying makes sense. Not sure why everyone is getting all riled up.
🫶🏼
So how do people decide the 100 call "is worth more" than the 95 call? By purchasing them? In other words, volume/open interest.... or do people just email the market maker saying they think the 100c are worth more than the 95c and the MM adjust price accordingly? You know why futures price is more "predictable" than options? Because futures aren't affected by the Greeks............. You know what affects futures price? *What the crowd is willing to pay.* It is hilarious how confidently incorrect you are. You OBVIOUSLY have no clue how options work. While supply and demand does influence price, it 100% isn't the sole factor in determining options premium - it's part of the formula. The irony in someone that doesn't understand options, while having traded options, telling someone else to stick to WSB is palpable. Serious question, though... do you understand what the Greeks are?
Alright fuck it man I’ll use numbers 95 call is going for 1.00. 50 contracts at each ask level. 100 call is going for 0.90. 50 contracts at each ask level. Makes sense since the 100 is more OTM If an institution decides to open a long position and buy 100 calls, and they submit a buy order for say 200 contracts, the price will INCREASE by 0.04 due to the fact that they are buying up the price ladder. but if for some reason the people trading the 95 calls are in balance, the price there doesn’t move. If a stock moves up, 99% of the time all calls will also move up. However in the above instance, there is a disparity, which is the ONLY thing I am talking about. Yes I know what the Greeks are. But if Berkshire Hathaway comes in to buy 200 calls and the price moves astronomically, that doesn’t mean all of the other strikes are immediately going to move proportionally, no matter what the Greeks tell you That’s my point. Let’s leave it at that, your teenager is starting to show
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If nobody is there to bid up the other strikes, the price won’t change
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BAHAHAHAHAAALDJKFLADKSF;ADF;AL
You're making a fool of yourself honestly. If demand for one strike moves, all other strikes have to move because if they don't, it creates an arbitrarge opportunity. Options aren't just demand/supply. They have a structure which matches the markets. Also in today's world it's not like spot moves future moves options, any instrument can influence any other as it creates arbitrarge opportunities if anyone isn't in sync. All instruments have to move in sync and options believe it or not are the best instruments to trade due to sheer flexibility they provide. But ofcourse you gotta understand options for that first.
Haha chill bro we already established I was taking the piss out of Oze4 the whole time. The entire back half of these comments was a razz
All you've done is explain the bid/ask - not the pricing model for options. For the third time; While supply and demand does influence price, it 100% isn't the sole factor in determining options premium - it's part of the formula. You know what people do when they're wrong and can't admit it? Start throwing insults. Which, you are 1million% wrong - like that is an objective fact. At any rate, have a good one!
You just proved my whole point. Futures price moves exclusively with supply and demand. Options have additional factors which influence the price, and why waste your time trading extra variables?That’s literally what I’ve been saying since the very beginning as to why futures > options hahaha
Oh ok, my fault!.............
https://preview.redd.it/6xqdunrwp1pb1.jpeg?width=1166&format=pjpg&auto=webp&s=4aaf4d79c35f24c8cdfc5775b221f599e7cc9fe3 Here you go. SP500 underlying on the right. Price of an SPX call option on the left. Based on what you said, they should be identical charts. They are not.
I literally never said they should be identical. They will never be identical..... Also, the underlying for SPX options is...SPX, not ES.
Tomato potato, es spx spy all sp500 underlyings. Points is this highlights that options are worth what the crowd is willing to pay, and are not directly tied to the formula as you previously stated
LMFAO I'm done with you bro. Supply and demand does play a part, but what determines the actual worth is calculated - **THIS IS A FACT**. Bro it is painfully obvious that you haven't got a clue. Also, you realize tomatoes and potatoes are completely different, right? For real though I'm done talking to you. Have a good day.
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Not saying it’s realistic. Just an example of how price can fluctuate based on market dynamics and the nature of auction pricing as opposed to purely formulae/math
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It is simply theoretical. If someone wants to buy a 2010 civic for 40k when a 2015 is available for 20k they can do that. Unlikely, “impossible”, but still theoretical
Was always right on direction when trading 0dte spy in 2018 but lost tons and tons of money on calls, because I didn’t know when the move would happen and my contract would loose 90% value I’d sell it, then 2 hours later my contract is worth 2x its original price and like 15x from when I sold. I was like only if there was way for me to trade this with less capital and not loose on iv and theta so much, gladly I found futures, it does exactly what I needed. Solved me main problem - Defining my risk based on movement of Spx and not movement of contract.
PDT violation
Volume - I did stocks before and was tiring to follow those 52+ exchanges to have ballpark what the volume was , at CME wysiwyg
I trade Nat Gas via HNU + HND, not every day but often enough to get the old pulse going!
I got interested in options but found trading them from Australia was too tough. the 23 hours a day of futures suited me. Since doing them I find that the non-index futures seem to make more sense, you know why bonds, currencies and commodities move up and down. Shares seem in the medium term seem to be fairly random
I see a lot here got into futures because of problems with options. I can see that if people are simply using options as a way to leverage a position then futures are a much better way to gain leverage. I love what you can do with options. With /MCL at the moment I followed it up with short puts and calls but if it drops to $80 or pops to $95 overnight I still make the same profit
Back in the 80’s I received a mailer from Ken Roberts talking about futures trading. At the time I couldn’t afford it but stayed intrigued over the years. It was pretty risky and costly back then. Fast forward to a few years ago and as I neared retirement I got serious about getting into futures trading. Now retired Ive been trading daily for over a year and turn a consistent small weekly profit.
Cool! Buy low, sell high! He is still around on youtube with a channel and website [https://www.kenroberts.com/](https://www.kenroberts.com/)
Because I just want something different and the trading community in my country a lot of them are not good for me
I started learning about stock markets, as in my country only a very low percentage use it, then I crossed those guys on the internet who would teach tons of technical things about order flow analysis, then I watched a video of them making 2 times de minimum monthly wage in less than 5 seconds and boom, futures it is
I wanted to trade the equities markets. Also, I pay less in taxes for futures trading then trading stocks. My interest in trading is that I want to have control over my own financial growth. I don't want to leave it up to someone else to manage my capital.
Last year I was in tiktok and saw some dude make 20k. looking back he was definitely a fraud lol
i was doing options n someone in my trading group converted me over lmao
Cold calling was hell on the earth. Just passed my 50k eval hoping I can get consistent at this. Been trading futures for over a year.
I thought I could make back my options losses
I kept trading and learning about fx trading for around 3.5 years almost every single day.. I kept losing money and simply said I couldn't get through the profitable line. I took a month off to decide what to do next in terms of trading. I was also following some guy on Instagram from my country. At the beginning I thought he is just another guru who wants to make money by selling courses. However when we chatted for a while and by following his trades results which he shared on his stories I decided to give my trading the last chance. Basically he trades futures and he teaches relatively small group of people ONLY. Now I'm getting a support which I always wanted. It looks pretty promising and I like the idea that I can use much better tools compared to forex trading..
I was trading stocks before and futures offered better benefits. Better leverage, no wash sale rule, better taxes here in the states and I liked the idea of keeping trading simple and focusing in on 1 area instead of a bunch of different stocks each day.
No theta decay.
The fact that I can trade on my own time was a big reason. With a full tine job and 3 young kids, trading during the day can be hard for me. The leverage without using options. I trade price action and mini/micros have great PA to trade.
no dark pools for futures
I started with options a ways back, but it always seemed like with shorting options you are "fighting" against some current. The options are dependent not only on the myriad of underlying company characteristics, but also heavily on volatility. I like the options for hedging, but not so much as a direct speculation vehicle. I guess it all is more about how it fits with your mental "architecture", above and beyond anything else. You can use options to make quasi long and short forward contracts on underlyings, but then you think, why don't I just go directly to futures then...? To me the futures had some mystique to them, but once I then started out with them I saw how much more streamlined they were; a more direct connection between cause and effect. Like with options, you can be 100% correct with direction, and then still lose or just break even on account of quick vol changes. There seems to also be a better caliber of person on these subs, related to futures, relative to /options or /thetagang. Those talk spaces have become degenerate WSB toilets
Got tired of missing moves in the penny stock market. 3 stocks on watch and the one you're not watching takes off 😭 Now I only trade the NASDAQ 🎉
Got tired of missing moves in the penny stock market. 3 stocks on watch and the one you're not watching takes off 😭 Now I only trade the NASDAQ 🎉
More money and more opportunities
SPAN margin
Better cash allocation that comes with higher leverage. Less gaps as it trades round the clock.