Selling Options on Futures? (Page 105) - Options on Futures | futures.io
futures.io futures trading
 

Go Back   futures.io

> Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures


Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,237 / 5,727
Last Reply:December 2nd, 2016 (12:40 PM) Attachments:642

Welcome to futures.io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.


You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike
     

Reply
 642  
 
Thread Tools Search this Thread

Selling Options on Futures?

Old March 17th, 2013, 09:21 PM   #1041 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
Broker/Data: Options Express
Favorite Futures: Options on Futures
 
MJ888's Avatar
 
Posts: 165 since Sep 2012
Thanks: 37 given, 123 received


mackg867 View Post
I think I may actually listen to the more experienced traders (and more successful!) and trade at lower delta. I thought I needed to go for the big premium to get solid returns, but as someone pointed out earlier it's all about ROI.

Mac

Options selling is a risk vs reward game. The closer you sell to the money, the bigger the reward in terms of higher premiums but your risk also increases quickly.

And no, you absolutely do not need to go after the higher premium to achieve solid returns. You can sell a tiny strangle (only ONE put and ONE call) with strikes that have delta's below 0.10 on many markets and be able to make good money. The other thing is in order to get decent premium at far out strikes with low delta's, you must be willing to wait longer or be willing to trade farther out months where the way out of the money strikes have plenty of time premium.

Reply With Quote
     

Old March 18th, 2013, 10:41 AM   #1042 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary


MJ888 View Post
Funny! I was absolutely thinking of you Ron99 when I set my order to buy back the CLK375 puts at 0.07. The next time I cover my shorts, I will post here first so be on the lookout.......Hmmmm, I wonder if that would be considered some sort of collusion trading by the CFTC?

As long as the order is not hit instantaneously, it is legal.

Reply With Quote
     

Old March 18th, 2013, 11:02 AM   #1043 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary



kisskais View Post
After reading all the posts and seeing crude up on early Friday, I decided to close both trades with a $600 profit less commission and will be watching on Monday and see if I can get back at a lower strike when crude dips again.

The trading gods are are with you since CL is way down today.

Reply With Quote
     
The following user says Thank You to ron99 for this post:
     

Old March 18th, 2013, 11:11 AM   #1044 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary

Today is a good time for another lesson.

Jun CL puts. 60 DTE. As I write this Jun futures are down 1.06.

70 puts settled at delta .0071 friday and at a premium of .03. Right now it is .03 bid .04 ask. Not much movement. You can sleep well even though futures are down.

80 puts settled at .0458 delta and at .19. Right now .24 bid .26 ask. It has moved .06 against you. You are not feeling well about this.

85 puts settled at .1196 delta and at .53. Right now .64 bid .71 ask. It has moved .15 against you. Pain is being felt.

Jul CL puts. 92 DTE.

70 puts settled at .0154 delta and at .08. Right now .09 bid .11 ask. A little movement but not too bad.

80 puts. .0781 delta. .43 premium. Right now .50 bid .57 ask. .54 last. Current delta .0909. Pain.

85 puts. .1625 delta. .96 premium. 1.10 bid 1.21 ask. 1.17 last. delta is up to .1793. Major pain and now very close to ITM.

Reply With Quote
     
The following 6 users say Thank You to ron99 for this post:
     

Old March 18th, 2013, 11:33 AM   #1045 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
Broker/Data: Options Express
Favorite Futures: Options on Futures
 
MJ888's Avatar
 
Posts: 165 since Sep 2012
Thanks: 37 given, 123 received

Futures Edge on FIO

Are you a NinjaTrader user?

 
Interesting how CL has rallied back to being only down 0.30 as I type this.......

Reply With Quote
     

Old March 18th, 2013, 11:44 AM   #1046 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary

I started following Dominick Chirichella @dacenergy on Twitter last week. He seems to have a good handle on the markets.

Here is what he posted last night when the markets opened lower.


Quoting 
I am not sure Cyprus warrants a global sell-off. This is a market to watch closely could be some buying opportunities in short term


Reply With Quote
     

Old March 18th, 2013, 01:11 PM   #1047 (permalink)
Trading for Fun
Reno, USA
 
Futures Experience: Intermediate
Platform: esignal
Favorite Futures: Oil
 
Posts: 70 since Jul 2011
Thanks: 14 given, 9 received

Happy Monday everybody,

well looks like the Cyprus news may not be so bad as everybody thought---so far at least. Futures opened yesterday down 20 and as I write this only down 3.5

Anyways, was wondering an opinion on a trade:

/ES April 1350 Put. DTE is 32. Credit 475 and it reduces my buying power (as per TOS) by 7500 ?

thanks and any critique would definitely be welcome

V

Reply With Quote
     

Old March 18th, 2013, 01:25 PM   #1048 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary


vmaiya73 View Post
Happy Monday everybody,

well looks like the Cyprus news may not be so bad as everybody thought---so far at least. Futures opened yesterday down 20 and as I write this only down 3.5

Anyways, was wondering an opinion on a trade:

/ES April 1350 Put. DTE is 32. Credit 475 and it reduces my buying power (as per TOS) by 7500 ?

thanks and any critique would definitely be welcome

V

Based on that credit I'm assuming you are doing 10 contracts.

Delta .0230. ROI based on my fees is 2.0% per month.

They're OK. ES may drop but I doubt it will drop enough in 32 days to force you out.

I sold 1250s on Friday.

Reply With Quote
     

Old March 18th, 2013, 01:34 PM   #1049 (permalink)
Trading for Fun
Reno, USA
 
Futures Experience: Intermediate
Platform: esignal
Favorite Futures: Oil
 
Posts: 70 since Jul 2011
Thanks: 14 given, 9 received

Thanks for the quick reply Ron,

Im sure this has been posted before so I apologize in advance but how did you get 2 % ? If i take the credit received and divide by my buying power reduced I get a 5 % ROI ? obviously im doing something wrong so if you could please elaborate?

thanks

V

Reply With Quote
     

Old March 18th, 2013, 01:42 PM   #1050 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary



vmaiya73 View Post
Thanks for the quick reply Ron,

Im sure this has been posted before so I apologize in advance but how did you get 2 % ? If i take the credit received and divide by my buying power reduced I get a 5 % ROI ? obviously im doing something wrong so if you could please elaborate?

thanks

V

SPAN margin is $700 each. It looks like TOS is adding more to that.

I add 2X the margin for cash excess. So in your case if I use 475/(7500+15000)/32*30 I get 1.979% monthly without fees.

Reply With Quote
     
The following 2 users say Thank You to ron99 for this post:
     

Reply



futures.io > Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

NinjaTrader 8: Features and Enhancements, Tips and Tricks

Dec 6
 

Al Brooks: Stop Losing when a Good Trade goes Bad, Correcting Mistakes

Elite only
 

Trading Technologies: Algo Design Lab hands-on

Dec 13
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Crude Oil (CL) futures inverse pairing options Big Mike Commodities Futures Trading 8 December 12th, 2013 12:00 PM
Recommend futures, options Broker? sam1197 Brokers and Data Feeds 17 March 27th, 2013 01:42 AM
Trading Futures with options as protection Gooffy2010 Commodities Futures Trading 6 October 2nd, 2012 05:55 PM
Selling Njniatrader sam1197 NinjaTrader 22 June 28th, 2012 01:40 PM
Zen-Fire Futures options tici88 Brokers and Data Feeds 1 July 30th, 2011 10:16 AM


All times are GMT -4. The time now is 10:15 AM.

Copyright © 2016 by futures.io. All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
 
no new posts

Page generated 2016-12-04 in 0.13 seconds with 20 queries on phoenix via your IP 54.205.8.87