What are the benefits & drawbacks of trading futures options opposed to Index Options? Options on ES VS. SPX? To my inexperienced eye they seem to offer the same risks & rewards, but the ability to own the underlying would give futures the edge.
I've always traded index options (such as the SPX) but was considering trading futures options (such as options on the ES - S&P mini). If SPX starts to move up and I buy a call for protection, time decay and falling volatility work against me. However, if I were trading options on the S&P futures in the previous scenario then I could buy the futures contract and not face problems with volatility or time decay.
They can't be that similar. What am I missing?
Thanks,
Clay
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