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Unless you have liquidity in options they can be a trap rather then a
salvation. The options in
the currencies and the bonds are usually fairly priced and fairly
liquid. The bonds more then
the others. So to trade the options you have to understand value and be
able to price the
options to know that you are not overpaying. There is the skew in
futures options that you
don't have in stock options. You should understand about implied
volatility and how that
impacts your option price and deltas to understand the relationship of
the option to the
underlying.
If you are using the option as a hedge, all you really care about is
what is the average cost per
day and what is my risk from 0 to infinity. Then you trade the future.
You know your risk and
you should know the target price of the future. If you reach the
target before the option expires
you sell the future and sell the option. Ira.
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