Options or Futures

[Vince_K 10]

If I need to choose a derivative to trade..which one should I choose over the other . What are the advantages , disadvantages , risk involved in each one of them especially when trading on indexes ?

From wht it appears on TL..there seem to be a preference for Futures over Options .

 

What brokerages would you recommend for either of them ?

 

 

thanx

Vince

[SIUYA 11]

The simplest and biggest difference that will make or break your strategy is time decay on the options....depending on if you are long or short.

 

Simply put for most people the futures have more liquidity, and smaller spreads than the options and a lot has to do with your strategy and the time frame in which you trade and how long you may hold positions etc, to make up for the spread, liquidity and time decay issues (or benefits)

 

There is no single general thing you can say to favour one over the other except to say - most people go toward futures for a reason......that says a lot.

(apart from the fact that options are harder to understand, follow and learn about)

 

Maybe you need to have more an idea of how you want to apply your strategy and what it is.

 

For options, and futures and stocks etc....I would recommend Interactive brokers - I use them and have not problems with them at all. However they are not as friendly for those with smaller accounts, and have data providing issues (not a problem for me) and might be more than you require.

Others might also recommend binary option providers - I dont know any i would recommend

[Larry1234 10]

I prefer to take long positions in options because the downside risk is limited. I would suggest you to start with options compared futures if you are novice to Derivatives.

[Vince_K 10]

thanx Siuya/Larry.... I am new to trading and still in the process of gathering information before I place my first trade . I am looking at swing trading stocks & options with some automation . I am inclined to using Sierra Charts as I can do the automation using C++ . But I also like Amibroker bcoz of its look and feel . From what I understand very few option traders use either of the 2 as their trading software . I could be completely wrong here but correct me if I am wrong .

As for Brokerages I know both IB & TD Ameritrade supports stocks/options trading with Sierra Charts . Are there any other brokerages where i can do both with Sierra Charts or Amibroker . What about Open E-Cry ...they do support SC but their website only talks about Futures ? Tradeking was another brokerage I was looking at but they dont seem to have an API .

Larry ...which brokerage do you use for Option Trading ?

 

thanx

Vince

[Larry1234 10]

thanx Siuya/Larry.... I am new to trading and still in the process of gathering information before I place my first trade .

Larry ...which brokerage do you use for Option Trading ?

thanx

Vince

 

I have my account with OptionsXpress (owned by Schwab)