On today’s segment of Futures Measures, Pete, James, and Frank take a look at dynamic share equivalency. They show us how we can calculate futures/ETF share equivalency. Depending on the product, ETF to Futures hedge ratios can be static or, in the case of oil, very dynamic.
It is important to note we do not utilize IV adjusted notional when trading the same underlying market. This is due to the IV being extremely similar between a future and ETF on the same underlying asset.