Would you consider options for daytrading strategies? The idea may be tempting, but reality does not favor this concept. Regarding of huge improvement in options liquidity, options may be less liquid than futures contracts. Additionally, options does not follow its underlying index as closely, as the other futures contracts do, mainly because of the option’’s “multi dimensional” nature, which is another area which can be used for successful trading. Based on our research we believe that trading index futures options using weekly time frame is an equivalent of daytrading in stocks and futures. Enormous growth of options markets in the recent 20 years and introduction of options expiring every week has brought whole large area for trading opportunities. And “multi dimensional” nature of options multiply them accordingly.
Our research results are only a part of our work. Selected models are being traded in real markets gathering additional information for engaging our results in trading on different levels of capitalization. During this process we also focus on finding possible weak points in trading operations. Spread orders are being selected based on liquidity observed in a live market trading and critical data for successful order placement is gathered.
Another research is conducted in the area of possible variations of the methods used in trading. The strategies with identical risk may look almost equal on paper, but in a real life they vary. Selecting the best combinations gives additional level of optimizing our findings. This way our results are the closest to real trading as they may be. The final product is not only the idea, but it is the concept tested against different market conditions along with complete set of “nuts and bolts” of live trading.
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