Maximum Profit (Options Vs Futures)

Question

Consider this scenario: Say the S&P 500 closed at 3400 today (Sep-9) and you knew (100%) for a fact that by the end of trading day tomorrow (Sep-10) 4pm it will close at 3200.
So now, given this fact, what do you think would be the action to make the absolute  most amount of money using all your capital at hand? Would it be (use ALL your capital on below choices):

Buying 3200 PUT options expiring on Sep-11 (Weekly ending) [closest expiry]
Buying 3150 PUT options expiring on Sep-11 (since it still has 1 day to go for time-value and due to the massive crash, it may get bit up high)
Or would you go far out of the money getting say 3000 PUTS with further expiry of Sep-30?
Or a 3400 PUT expiring on Sep 11, so you get a full 200 point intrinsic value
Buying Sep-18 Short Futures e-mini Contract.
Buying Dec-18 Short Futures e-mini Contract.

In a nutshell, if all things being equal inch for inch and pound for pound, would Futures contracts make most money or extreme out of the money PUT options which are about to expire but suddenly go in the money. I would assume Options do. What do you think?
P.S. OR relating to my other question, credit default swaps? But I think those are for longer term crashes and require debts to be defaulted and hence not suitable for this scenario?

ThatDataGuy · Accepted Answer

Assuming that the market's estimate of volatility, interest rates, and it's expectation of the future value of the index remains the same, the answer is probably 5, and then 6.
Buying any option will cost you a non-zero premium, and the delta will always be less that than of the future. Plus, you are also getting one day closer to the expiry which erodes the option value.

Bob Baerker · Answer

I'll just address the option component of this.
There are software programs such as Optionvue which can tell you how a position (or multiple positions) will perform  at any price, at any implied volatility, on any day prior to expiration.
There is a fairly easy alternate answer to this but it can't be provided based on the information provided.  This could be roughly calculated in Excel with some fixed assumptions:

Cut and paste the strikes and put prices into the spreadsheet

Determine how many of each put you could buy with your starting capital

Assume that all strikes above 3200 go to parity and will be worth their intrinsic value

Calculate the gain (strike - 3200) x number of puts

Anything involving value prior to expiration (time premium) and variation of IV  would require an imbedded Black Scholes calculation and that's a far more complex spreadsheet.

Maximum Profit (Options Vs Futures)

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