Would like to explore ask few things about use of Weekly Expiry options
( Options on Futures NOT on ETF or Stock )
To start with although they "look" cheap" because of the short duration on an annualized basis they are expensive!
For example I checked the cost of a ATM PUT on ES ( ES @2170)
- Expiry 1 day = around 7.50
- Expiry 9 Days = around 13.50
A) Married PUT or Protective CALL (Both ATM)
Q1) Is it worth doing it? for the Strategy to succeed the underlying has to move not only in correct direction but has to recover cost of the Protection.
Q2) for this what is the "Optimum" time frame of the Option expiry ( using weekly)
Q3) What indicator can be used to back study how much a Futures contract moves in a specific time frame ( in terms of points not %)
B) Buy Straddle ATM ( Long CALL + Long PUT)
In above example = approx 15 or 27 points approx
Q: For the Strategy to succeed the underlying has to move rapidly + sufficiently in any direction.
Same questions as above