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Thank you for posting this. It really got my wheels spinning. I trade index options and never really gave any thought as to using them in futures trading. I have been on a simulator trading ES for a year and I just am not profitable.
So for better clarification, for your initial set up, you are looking for a bullish trend? You long a futures contract, and then long an ATM put option? What expiration do you use?
I would love to learn more about your strategy.
Thanks,
Steve
Can you help answer these questions from other members on NexusFi?
Yes my default assumption/position is long, but I am able to profit even when the market moves against me. The name of the game is cost basis reduction. I use short calls and correlated futures to help with this. My opening trade expires in 2 weeks, however sometimes I will sell calls 30 days out. There is always a volatility aspect to my trading, and always a kurtosis exploitation (look at an options chain- do the prices change by equal increments with each point? NO!). Let me know if you have any more questions.
well your initial post started out easy enough and tehn as people posed risky situations to you that are real world you all of a sudden showed that your strategy is constantly chaning and went from hey buy a futures contracts and simultaneously buy an ATM put option in the same future! then you went on to say well i am mostly covered but yeah im not always covered to well now we need to do some diagonals and verticaals and some OPTION spread trades all while being directional LONG biased in our open futures contracts.
why not just trade the option spreads since they seem to be what saves you when the mkt is not full on bull and you must make very big money to offset the full on bull if you are losing in your options rapidly and as time disappears and if the mkt tanks right before expiration you are losing big on your long future and probably not making as much on your long put option depending on where the strike price is at the moment before expiraton.
I think you brought up some really great points and ideas but to try and show people your strategy which is chock full of discretion and overlapping strategies is a tuff sell only because it would be too difficult to follow systematically but this does not mean it is not a good strategy for you.
if it is working for you terrific and like i said you did bring up some great ideas but the path down to do what you do when you do it is tuff.
You are correct that doing what I do is far more difficult and nuanced than I allude to in my initial post. I wanted to give people a general idea of what I think is most profitable and most likely to result in success. I make trades/adjustments almost on a daily basis as well. I use a TON of calender spreads to hedge; I use a lot of butterflies to hedge. I cannot explain every contingincy in my initial post. However, I have an answer for everything. No matter what the market does at a particular period of time, I have an answer, and know how I will respond to maximize my profit. Recently the market has been "somewhat sideways", so I responded by selling iron condors to generate income to pay for my calendar hedges that will soon expire etc.
TLDR: This is a long post so I will bold a few things to help draw the eye.
"Hope this makes some sense"
Collectively what you have written makes total sense to me. Given my FIO account name maybe that is not a total surprise.
Your first post may read a bit like "I would like to share with you this awesome strategy"
But you don't have "a strategy"
But you don't have "a strategy" and "a strategy" is not the front door to the unique value you are bringing in this thread. You are bringing together many things to be a successful trader and that includes a number of strategies you pull from your toolkit to face what is before you at the moment.
Rather than a strategy thread, to me this thread read much more holistic than a strategy thread. For me the context is straightforward when I expect the discussion to be broad and complex. ~"As a Mature Trader I pull many things together to deploy my primary strategies, adjusting and responding to the constant change the market brings us."
Something like text from your first post, as I now read it.
"I have become a proven, seasoned, successful, mature trader.
I trade futures, I am zealous fanboy / supporter of FIO and I love this community. I appreciated, and benefited from plenty of community members' posts so now of the many skills, capabilities, skills, strategies, perspectives, methods and techniques I am now able to fairly consistently able to orchestrate together successfully I endeavor to share a few of the most valuable nuggets with you guys."
Yes of course a few of your most important strategies are very valuable.
Beyond that me a few important key words above that make this thread of unique, rare value are the word "holistic" and phrases "of the many" and "I am now able to fairly consistently able to orchestrate together successfully"
To me a good mature pragmatic advanced discussion of the broad breath of the big picture you have become comfortable navigating and from a large broad view knowing which methods, strategies and technics to deploy when would be very valuable.
I would love to more about your:
1) Bigger picture: Your first and most critical skills, your River Rafting Guide skills. Knowing what to do when. When to stay out, what method or strategy when for an entry and why or why not. And then responsive position management "what I do is nuanced ... I make trades/adjustments almost on a daily basis as well." Every time we float the river (the market) the ride is different, the obstacles and opportunities are different. What I take from your posts is that you have developed confidence in your ability to be successful through your broad collection of skills and capabilities. The only consistency of the river is the constant change, the constant surprise. No matter how the river looks, no matter what surprises lurk when we round the next bend you quickly discern how to handle the situation to your benefit. So would love to hear more about the what you decide to do when and the watershed decision factors driving those conclusions.
2) Operational Execution: Your Orchestra Conductor skills (which of my many things to pull in when, at what cadence and how loud, and which should sit patiently silent) market signals and decision processes. Executing all of this correctly is very difficult, a critically important skill by itself.
