Friday, March 10th, 2017

How do I get started trading equity options and futures?

I have a hedge fund quant, so I’m not asking for guidance on how to learn modeling or developing strategies for options trading. I have experience doing work for the valuation of options and the development of dynamic replication strategies, but I’ve never done comercio.Quiero start relatively small – I’ll get comfortable about $ 20K at risk. I would be looking at options hedge against options in trying to limit the amount of dynamic hedging. I hope that I will need to set a certain margin, in addition to any option premium network. $ 20K is reasonable? Are there brokers who specializes in options? Does anyone recommend CME, CBOE, or other tools? (I know some exchanges offer tools for the subscription.) Thanks!

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4 Responses to “How do I get started trading equity options and futures?”
  1. Houyhnhnm says:

    OptionsXpress specializes in options, I don’t know about futures.

    Interactive Brokers doesn’t specialize in options, but they do futures so I presume stock futures are available. IB handles stocks and bonds also, so I suppose you could use them for margin if you have them.

    Account size all depends on position size and potential risk. Hedged trade implies to me that every trade has a max dollar loss, which helps planning quite a bit. Rule of thumb is you need to be able to withstand 20 losses before wiping out your account or its getting so small that you can’t trade. 20 losses in a row is unlikely, but 5 in a row is very common. If you can only stand 10 losses and you get 5 in a row, you’re under huge psychological pressure with half your stake or more gone. So if each trade has a maximum possible loss of $1,000, $20k should be fine, assuming you meet margin requirements.

  2. Founder, MastersoEquity.com says:

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