doubtful you won't get much past the ask as its only market makers are providing liquidity and guess what the market maker will do if you buy/sell the option? Get it right and you can see a huge appreciation of value. Here are the advantages: Leverage 5k is the margin requirement for most contracts. Swing trading, trying to guess/predict/ride sudden market momentum. Interest rate and optimal leverage plays Since the 5k investment is equal to 120k of the S P 500 index currently then you'll likely beat out the market by buying one future contract and putting 115k in safe treasuries or bonds or uncorrelated assets. You can go long or short the near month expiration and the opposite for the far month. I've been trading spot forex for a while, and have been looking to move to futures. The variety and price efficiency of futures makes things pretty attractive in this area.
I m planning to start trading, and I m sure I m not alone. Any ins ight you guys can give to us newbies? You can daytrade both futures and forex with less than 25k.
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Span margin, which is like portfolio margin on steroids. Even if you don't do a full perfect pairs trade it is still a great option to reduce the leverage too on whatever index future you're trading so you can stay in longer or overnight. Originally they were used by farmers to sell future crops early and guarantee some amount of sales. Basic questions I have are:.Who do you use and why? 60 of your profit from futures will be taxed as a long term gain and 40 will be taxed as short term gain. ES is usually highly liquid during regular hours with average volume of 1 million trades and bid-ask spreads are usually one tick. Also any tips or educational pieces to read or watch are very much appreciated thanks. Live in US and already have Scottrade account which was bought out by TDAmeritrade a few months back and it's supposed to merge soon. The beauty of span margin is you don't need a 125k account to be eligible. 1 contract 500 spy shares.