Weekly mini SP options been around for the last few years and provide traders with the ability of speculating with options rather than day trade as well as hedging their day trades if they choose to do so. Learn more about the mechanics and the uses of weekly mini SP options.
There are 's of indicators available to traders to assist with decision making that can be applied to technical analysis, which is precisely the reason to utilize a sound and inexpensive weekly ES strategy to compliment a day trading strategy. As a hedge, no need for stops As a pure speculation. A relatively inexpensive way to speculate on market direction in a time frame that can be for minutes, hours or a few days without the need to use stops.
Briefly, the definition of an option contract from the National Futures Association is: An investment vehicle which gives the option buyer the rightóbut not the obligationóto buy or sell a particular futures contract at a stated price at the specified expiration date. There are two separate and distinct types of options: These weekly options are European Style, Exercisable to the nearest futures contract at 3pm Central time on Friday.
If in the money by any amount, the exercise is automatic. If the market goes down to But also have a put option worth approximately the amount the option is in the money 15 points intrinsic value,, plus extrinsic value or time value if you just bought this option today this value should be at least worth 5.
If you were to offset this strategy with the market at BTW the margin is greatly reduced to reflect your actual risk of only the distance between the strike on the put and your futures entry price, in this case The reduced margin should also allow you to hold this strategy overnight. Remember this is just a hedge, if the market rallies to This strategy allows you the somewhat peace of mind of not only having to determine where to put a stop, but also potentially allowing you to hold on to a much larger move, have fun with the math and see for yourself!
Ask your broker about writing premium above this strategy to maximize the cost effectiveness of this strategy. Buying weekly mini SP puts or calls can be a relatively inexpensive way to speculate on market direction that can be for minutes, for hours or for a few days. Screen shot from Aug. If your trading bias is for the market to go lower soon, but you are not certain when, it could be a matter of hours, or days and you want a lower risk way to participate, Buy a PUT.
Let's say you believe the market can test the level before Friday at 3PM Central, and you don't want to spend more than a few hundred dollars, you see the put on your trading platform is bid at 3.
No margin required, what is required is the cash in your account to buy the option. Or, if you believe the market will rally to Its bid at 5. If the market closes at You can get creative with your offsetting futures trade if you are in the money by placing a GTC sell limit quite a distance above your strike price in the event the market rally's, let's say at Once you are filled, you have locked in your gain and simply wait for the exchange to convert your in the money call on Friday afternoon.
But what happens if after you bought your You lose the premium you paid on your option, all You are now short the futures from Disclaimer - Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.
Past performance is not indicative of future results. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. There are two main uses for the Weekly options As a hedge, no need for stops As a pure speculation. Ask your broker about writing premium above this strategy to maximize the cost effectiveness of this strategy As a Pure Speculation Buying weekly mini SP puts or calls can be a relatively inexpensive way to speculate on market direction that can be for minutes, for hours or for a few days.
Using weekly options is another smart tool to use to benefit from price action in the short run.More...