Future V/s Option

Discuss Future V/s Option at the Derivatives within the Traderji.com - Discussion forum for Stocks Commodities & Forex; In a hedging strategy where you are selling a stock and buying calls, is it ...


Go Back   Traderji.com - Discussion forum for Stocks Commodities & Forex > THE MARKETS > Derivatives

Notices

Derivatives Discuss Futures & Options in securities whose value is derived from an underlying instrument.


Reply
 
Thread Tools
Sponsored Links
  #1  
Old 16th September 2004, 08:26 PM
Member
 
Join Date: Mar 2004
Posts: 742
sh50 is on a distinguished road
Default Future V/s Option



In a hedging strategy where you are selling a stock and buying calls, is it preferable to buy futures instead of calls since in futures one can put a stop loss.

I understand that in calls one has to pay premium. How does it compare with the margin to be paid on futures.
Reply With Quote
  #2  
Old 17th September 2004, 10:27 AM
Member
 
Join Date: Jul 2004
Posts: 30
TradingPicks is on a distinguished road
Default Re: Future V/s Option

Quote:
Originally Posted by sh50
In a hedging strategy where you are selling a stock and buying calls, is it preferable to buy futures instead of calls since in futures one can put a stop loss.

I understand that in calls one has to pay premium. How does it compare with the margin to be paid on futures.
The premiums that you pay in buying put or call options is actually the maximum loss that you can suffer in case the trade goes against you. In effect it behaves like a stoploss too! Also there are no margins to be paid when you buy put or call options.
Reply With Quote
  #3  
Old 21st September 2004, 09:13 AM
Member
 
Join Date: Mar 2004
Posts: 742
sh50 is on a distinguished road
Default Re: Future V/s Option

Thanks for clarifying. What I wanted to know is that are futures more costly(margins) or options(premiums) more costly. I know that premiums would depend upon the strike price and that varies but can you give a gross approximation or is it like comparing apples and oranges.

Last edited by sh50; 31st January 2005 at 08:14 PM.
Reply With Quote
  #4  
Old 21st September 2004, 11:04 AM
Super Moderator
 
Join Date: Jun 2004
Posts: 1,747
Traderji has disabled reputation
Default Re: Future V/s Option

Quote:
Originally Posted by sh50
Thanks for clarifying. What I wanted to know is that are futures more costly(margins) or options(premiums) more costly. I know that premiums would depend upon the strike price and that varies but can you give a gross approximation or is it like comparing apples and oranges.
It is like comparing apples and oranges!
__________________
Best Wishes!

Traderji

www.Traderji.com
Reply With Quote
Sponsored Links


Reply

Bookmarks


Advertise Here


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off

Similar Threads for: Future V/s Option
Thread Thread Starter Forum Replies Last Post
Put Options to protect your stock portfolio Mohan Options 10 23rd June 2008 03:16 PM
Make money by writing call & put options TATrader Options 31 20th September 2007 08:27 PM
Interpreting future and option statistics. sh50 Derivatives 1 4th February 2005 09:45 PM
SPECIAL Market Option Trading Strategies TradingPicks Options 1 14th September 2004 09:15 AM
BEARISH Market Option Trading Strategies TradingPicks Options 0 12th August 2004 10:11 AM


All times are GMT +5.5. The time now is 05:46 PM.

Indemnity, Disclaimer & Disclosure Notice:
• By visiting Traderji.com you indicate your acceptance of our Forum Rules Disclaimer & Disclosure and indemnify Traderji.com, its associates and related parties of all claims howsoever resulting from the usage of the forum.
Disclaimer: Trading or investing in stocks & commodities is a high risk activity. Any action you choose to take in the markets is totally your own responsibility. Traderji.com will not be liable for any, direct or indirect, consequential or incidental damages or loss arising out of the use of this information.
Disclosure: The information in this forum is neither an offer to sell nor solicitation to buy any of the securities mentioned herein. The writers may or may not be trading in the securities mentioned.
• All names or products mentioned are trademarks or registered trademarks of their respective owners.
General Content Disclaimer Notice:
In light of our policy of encouraging candid, open exchanges of views and the rapid distribution of information originating from many sources, Traderji.com cannot determine the accuracy of information that may be uploaded to the forum. Opinions, advice and all other information expressed by participants in discussions are those of the author. You rely on such information at your own risk. You are urged to seek professional advice for specific, individual situations and not rely solely on advice or opinions given in the discussions. Since Traderji.com is an open and free discussion forum, any comments made by members of this forum in their posts reflect their own views and not of the owner or administrator of Traderji.com. Thus the owner/administrator indemnify themselves of all claims whatsoever and will not be liable or responsible for any members comments/views in this forum Traderji.com. If you find any objectionable or offensive posts made by members of this forum which you would like to bring to our notice for removal then please Contact Us.
 


Copyright © 2001 - 2008, Traderji.com All Rights Reserved.

Recommended Websites - www.TradersEdgeIndia.com - www.TradingPicks.com - www.MasterOfTrading.com