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> However, all is not lost. Now this may come as a surprise to some,
> but if you trade options, you never look at an option chart,
> anyway. You trade the underlying *using* options; the chart of the
> underlying is what you watch (plus the option price on your order
> entry screen).
Thanks, Michael! I've mentioned my quandary several times on several
lists and this is the first time anyone has pointed out this basic
misunderstanding.
> As regards liquidity, the volume figures you are seeing on that
> website may be a bit deceptive. They tell you about the trades that
> actually happened. They don't tell you anything about the depth of
> the market at any given time, which may be much greater.
I see your point. Your depth chart is very illuminating. So even
though there may not be any trades for minutes or even hours during
the day, there are always hundreds or thousands of bids and offers
right off the last price, just waiting for someone to hit them? Very
interesting. Apparently they're waiting for the market to move their
way, and they're willing to wait for a better fill instead of hitting
the current price?
> Slippage is a fact of life in all markets, so also in options.
> However, it's not as bad as you might think. ... I assure you, you
> will be only too happy to give up some slippage to pocket the huge
> profit (4 strikes!) that you have made.
Why would I be happy to give up slippage if I *don't* have to pay it
with futures? I'd be happy the trade went my way, but if slippage
takes 2-3x more of my profits than if I'd traded futures, that's not
a very efficient way to trade a strategy.
> There are a few more things that I am sure you know about. One
> important point with options is time decay.
> Another thing to be factored in would be volatility.
Yes, more complications of options. :-) But it appears that options
may be a more viable vehicle for me than I thought.
Thanks for the tips, Michael!
Gary
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