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  1. Introduction - Day Traders
  2. Introduction - Day Trading and Options
  3. Types of Options
  4. Near Month In-The-Money Options and The Protective Put
  5. Stock Options and Weekly Options
  6. Mini Options
  7. Index Options and Mini Index Options
  8. Binary Options
  9. Options on Futures
  10. ES Weekly Options and E-Mini Options
  11. ETF Options and IRA Options
  12. Conclusion

10. ES Weekly Options. More commonly known as weekly options on futures, these are used for day trading and short-term swing trading. Weekly options on futures offer another method of day trading futures with several benefits noted:

  • No futures account needed.
  • Weekly options offer limited risk.
  • Pattern day trading rules don’t apply.
  • Due to the option Greek, if the trader goes long, options increase in value more quickly as they move favorably, but are slower to decrease in value if they are moving against the trader.

The negatives are:

  • Short time to expiration.
  • Harder to set limit orders in expectation of entry or target.
  • More effort is required to place orders.

As with trading futures, day trading the ES weekly options on a 15-minute chart will allow the trader to access more worthwhile intraday opportunities, compared to the daily chart.

11. E-Mini Options. An e-mini contract is an electronically traded futures contract that is a smaller version of a standard futures contract. As with mini options, an e-mini contract follows the structure of its regularly sized counterpart while being smaller and correspondingly cheaper. While these contracts offer greater leverage for a smaller investment, the flip side of this is that the potential loss is also magnified. E-mini contracts were first made available for the S&P 500 Index and are now available on many other stock market indexes like the Nasdaq 100 and S&P Midcap 400. These options operate in the same way as options on futures, giving the buyer the right (but not the obligation) to buy or sell the underlying futures contract at a specified price within the duration of the option contract.

Online day traders can take advantage of a popular use of e-mini options as a hedging or leveraging tool. These options can be used to increase the gain on futures trading. They can also help to protect a position that is vulnerable to movements in the market.

ETF Options and IRA Options
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