Hi everyone my name is Mike and I am new here. I am running my trial period and figuring things out on here. I found that this platform doesn’t support futures options and complex option orders which is about 90% of what I trade. I find trading that way I am able to have less swings in my portfolio and the futures options have dramatically better BPR because of SPAN margin compared to the stock options market.
Are there others on here that would like C2 to add those to the platform?
I new here as well, doing a trial.
I would like to have the platform allow futures options and I hope they add that capability soon.
I’ve combed through some of the past posts about this topic and it seems like there is not enough demand here for them. Also not enough of their automated brokers have them on their platforms. I can convert some of my index futures options strategies to the related ETFs, but the BPR won’t be as capital efficient. Good luck trading.
Another problem with futures options is that the bid/ask spread can be very wide at times.
For example, I just checked out the NQ at the money futures call option of 12520 expiring next Friday, 12/11/20. There’s currently a $2 bid/ask spread, which represents $40 (2 X $20). In times of higher volatility the spread can widen considerably more than that.
Since C2 converts limit orders to market orders for autotraders if the trade is not filled at the limit price within a few seconds, there would be too much slippage for each trade for the autotraders with futures options in my opinion.
Wider slippage happens in all of the larger product compared to their small counterparts. The larger products don’t have as much liquidity so you have to weigh in commissions, fees, and speed of fills to see what is better. Look at SPX compared to SPY. If slippage was the issue then C2 wouldn’t let you trade SPX nor NDX. Now I can see their argument for liquidity since demand isn’t as high compared to the index/ETF options. I’m virtually always short on options so I don’t mind an increased slippage on futures options since I’m counting on time decay to help me. SPAN margin requirements are significantly better leverage when you are short compared to the margin requirements in the normal options market. A 2 lot for /MES is equal to a 1 lot of SPY. However the buying power reduction for SPY is at least 250% more when you are short. I prefer the capital efficiency of futures options.
@NextLevelTrader, as a suggestion you can use SPX and NDX options in place of of ES and NQ options but note the different sizing. ie SPX options are $100 per point whereas ES futures options is $50 so you would need double the ES futures options in ratio to the SPX options.
But its not perfect since those index options are not tradeable after hours which makes the futures options more flexible. Also the margin is quite high with naked SPX and NDX options which means its best to put on spreads to reduce margin requirements.
Another option for ES is to use the SPY options (which is 10 times smaller than the SPX)
In my real money margin account I trade /MES options, but for my trade strategy here I am going to use SPY. I won’t get the BPR benefit, but it will have to do.Doing the ETFs more subscribers would be able to participate anyways. Some of my positions are spreads, but C2 doesn’t let you place complex options orders so those aren’t an available. I want to keep it simple enough for subscribers to follow. Thank you for your input.