Ding Ding Ding! Round 1!

Options Vs Futures. Your Money Vs Prop.

Options Vs Futures. Your Money Vs Prop

Ding Ding Ding!

I saw a raging fight on Twitter recently with a Furu trying to shut down an established trader on the issues that I speak about in this blog. I would like to thank the furu I will never name for inspiring me to write this for you all!

It surprised me to read that nearly 40% of my readers are trading SPY options contracts according to the recent survey, I should have asked if these were short dated (0 to 10 days to expiry) or ones that have a longer expiry.

For me, if anyone is a trader of indices then trading futures is a no brainer. And if you are starting out on your trading journey then trading then an Apex account is equally a no brainer. Today, I dive into why:

Options and futures are both derivatives, which means they derive their value from an underlying asset. In the case of SPY and ES this asset is the S&P. However, there are some key differences between the two that make SPY options far riskier than futures.

But first, let’s wrap up the debate around prop accounts and your own money. I will keep this one quick because for me, it’s three obvious reasons:

1: The Take Home

With Apex, you don't have to risk your own money. They provide you with the capital to trade, and you keep 90% of your gains plus your first $25,000 in profits! For me, this is the only way to get started in trading without putting your own financial security at risk. Why would you trade your own money when you don’t know how to even trade yet? Let them carry the risk and not your own hard earned cash.

I do not work for Apex, and I will only ever promote something if I use it myself. You can get an 80% lifetime discount on Apex using the SAVE80 discount code. This isn’t being advertised anywhere! You’re welcome!

2: Reduced Risk

It took me over 20 attempts before I had an Apex account that was funded. It was fucking hard work until I was good enough to pass the evaluation and then able to sustain it. If someone tells you that they are new to trading and did it in less time, honestly, don’t believe them. Whilst blowing up stupidly so many times (although incredibly stressful) I was able to not lose much more than the $40 monthly subscription fee each time. A better outcome than losing over $50,000 if that had been my own money. Yikes!

3: The Leverage

My main accounts are the $100k Apex accounts. You can pass multiple accounts and then use trade copier to trade each account with the same trade, thereby reducing the risk in each account but making the same income! Let me be clear, I don’t have several $100,000 to risk or just sit in accounts so I can use the leverage. Apex give you more capital than your typical retail trader, which means you will have more buying power (leverage) and be able to trade larger positions. This can lead to higher profits, but of course it also comes with more risk which is why you spread your trades over several accounts.

These three reasons are key in me using Apex. Once I am in the region of making $200,000+ a year, I will move to using my own money as the tax burden will be less. But until then, Apex all the way!

Okay, now let’s move onto all you options degenerates, what’s my beef with you guys? There’s quite a few but here are three of the top ones!

1: Time Decay

Firstly, one of the biggest risks of trading options is time decay. You don’t just lose money being wrong on options, you lose money the longer your bet is wrong, even if price is staying within a range. This is due to time decay which is the loss of value that an option experiences as it gets closer to expiration. This is particularly true for 0DTE options, which will lose value exponentially. Futures do not have time delay. Wonderful.

2: Greeks

Another risk of trading options is the Greeks, but what the hell are they? Put “simply”, Google says:

The Greeks are a set of measures that quantify the sensitivity of an option's price to changes in various factors, such as the price of the underlying asset, interest rates, and volatility.

If you didn’t understand much of that, don’t worry. You are not alone, this is why experts like Cem Karsan are needed, they help the likes of you and me understand it as best we can. The complexities associated with the pricing of options is enough for me to make me want to avoid them in their entirety. The value of futures does not have implied volatility based on greeks in the same way. They are a stable asset in comparison. Wonderful.

3: Zero DTE Risk

I can’t stress this one enough. If you want to yolo a $50 bet, then options are great (but dangerously addictive). But understand that it is a yolo. Nothing more. 0DTE options, or any options that expire within the next week are incredibly risky. This is because they have the most time decay and are the most sensitive to changes in the price of the underlying asset. Traders who buy 0DTE options are essentially gambling not trading. Remember that.

Futures

It should be clear as day now. Futures contracts are less risky than options contracts. Fact.

They do not experience time decay.

They are not as sensitive to changes in the Greeks.

There is no 0DTE on futures.

If you needed one more reason to be convinced, here it is: Futures contracts are more liquid than most options contracts. This means that they can be bought and sold more easily, which can again help to reduce risk.

Seriously guys, until you can maintain an Apex account for a whole year and it makes more money for you than a 9 to 5 would make you. Do not gamble. Learn to manage your risk instead.

PW

Apex Prop Trading

I found my consistency using Apex Prop Trading. I wrote about it in detail here.

Click here to find out more and get a 50% lifetime discount.

Walnut Footprints

I explain how to read my footprints here. You can download and use it for free.

I wrote a detailed breakdown of how to sign up for a 14 day free trial of Sierra here.