I've been circling the SPI futures contract now for around a month. Signed up to IB and I"m just putting down the final calculations when I hit a few concerns.
Now from my understanding the inital margin in roughly $6000 ATM. So if I entered into 3 contracts (initial 18k) and there is a 30 point movement then I could expect a 2.2k return? Is this right? Thats just over a 10% return while the options contract would have chalked up a 60% return. Doesn't sound like leverage to me
Have I calculated this right?
Was anyone else concerned about putting such a large amount of money up front for that kind of return?
I wanted to use the SPI to hedge any option contracts I have on the XJO, BHP or CBA as these tend to follow each other closely aren't exactly the most liquid.
So if I wanted to hedge a 20k XJO position against a 10k unwanted movement then I would need to put up what? roughly 80k on a futures position?
I've only been trading a year any I don't av that much, nor do I want to take out a loan. Have I calculated everything right? I haven't traded futures before. I didn't want to use such a large % on a hedge. Thats what 400% on a hedge?
Everywhere I've read on futures says that they are "much" riskier that options.