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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:567,835 / 5,727
Last Reply:9 Hours Ago (12:40 PM) Attachments:642

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Selling Options on Futures?

Old March 22nd, 2013, 12:56 PM   #1091 (permalink)
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kevinkdog View Post
Someone got lucky today...

1 CTK36700P sold at .10 today. Yesterday it was at .01.

I guess sometimes it pays to have some "hope" limit orders to sell out there - monthly ROI on that option was 108% !!!

Do the exchanges sometimes wipe out these bad trades (I'm guessing someone slipped a decimal point)?

I have been on the WRONG end of that luck in the past and the exchanges nor my brokerage firm will do anything about my "fat finger" mistake with order entry.

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Old March 22nd, 2013, 12:57 PM   #1092 (permalink)
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kevinkdog View Post
Someone got lucky today...

1 CTK36700P sold at .10 today. Yesterday it was at .01.

I guess sometimes it pays to have some "hope" limit orders to sell out there - monthly ROI on that option was 108% !!!

Do the exchanges sometimes wipe out these bad trades (I'm guessing someone slipped a decimal point)?

No they don't wipe out those trades.

The trade was at 3:53 am EDT. I wonder if it is a IB trader that hit his margin limit and IB did a market order to get him out.

I saw that and went and looked at how often that happens. Very rarely.

If you place orders to sell things like that at OX they remove the margin required from your buying power when the order is placed. So you really can't do that there.

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Old March 22nd, 2013, 01:00 PM   #1093 (permalink)
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MJ888 View Post
I have been on the WRONG end of that luck in the past and the exchanges nor my brokerage firm will do anything about my "fat finger" mistake with order entry.

I haven't had a decimal mistake but I have bought when I wanted to sell and visa versa. Painful!

Wasn't there a Japanese trader who bought or sold a million positions instead of 1,000? Or something like that?

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Old March 22nd, 2013, 01:14 PM   #1094 (permalink)
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ron99 View Post
Another new OI record for the CME NG contract. OI has gained 178k in only 16 trading days! 15%

When the weather turns and the new longs head for the exits it will be fast and hard.

I'm looking to sell calls when it turns.

Are you concerned about the fact that we aren't matching up with typical seasonal tendencies for the year so far?

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Old March 22nd, 2013, 01:32 PM   #1095 (permalink)
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eudamonia View Post
Are you concerned about the fact that we aren't matching up with typical seasonal tendencies for the year so far?

Good question.

The weather is the seasonal tendency that is not normal. When that gets back to normal then so will the futures. High temps for the day will not be below 40 in the high NG usage areas for much longer. Certainly not in May.

Also the amount of NG production (horizontal fracked wells) that can be turned on if prices get too high is huge. Also coal will start to displace the NG that displaced coal when NG prices got low. These things will keep a lid on NG prices for the foreseeable future.

The only thing that will change this is more NG exports or increased usage of NG by trucks, cars trains etc. And that will take a years to happen.

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Old March 22nd, 2013, 03:58 PM   #1096 (permalink)
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NG article...kinda thin though....

http://http://www.cnbc.com/id/100582414

Have a good weekend everyone....

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Old March 23rd, 2013, 12:02 PM   #1097 (permalink)
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kevinkdog View Post
I have not posted here for a while, but I am enjoying the conversation...

My little test account with this method is doing well. I think today was the first time everything I sold is valued at 1!

Easy to get complacent and bored with this method, but it is working.

Right now, I'm on pace for >40% annual return. But, there is a lot of the year to go, and it is hard finding suitable candidates. Plus, if I add $ to this account, selling volume might also prove tricky.

While sometimes it is hard finding suitable positions and buyers of those options, it can be done.

So far this year I have had 1,301 short options expire in 2013. All have been ridden to expiration and all expired OTM. They made a net of $34k.

Currently I have on in all of my accounts 1,724 short options. They are currently up a net $37.8k. They have $19.4k possible profit left in them.

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Old March 23rd, 2013, 12:09 PM   #1098 (permalink)
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ron99 View Post
While sometimes it is hard finding suitable positions and buyers of those options, it can be done.

So far this year I have had 1,301 short options expire in 2013. All have been ridden to expiration and all expired OTM. They made a net of $34k.

Currently I have on in all of my accounts 1,724 short options. They are currently up a net $37.8k. They have $19.4k possible profit left in them.

Ron,
Do you have to pay estimated taxes quarterly for your regular accounts? If so, is there a program or method to do so?

Thanks,
r

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Old March 23rd, 2013, 12:10 PM   #1099 (permalink)
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ron99 View Post
While sometimes it is hard finding suitable positions and buyers of those options, it can be done.

So far this year I have had 1,301 short options expire in 2013. All have been ridden to expiration and all expired OTM. They made a net of $34k.

Currently I have on in all of my accounts 1,724 short options. They are currently up a net $37.8k. They have $19.4k possible profit left in them.


That is encouraging to know. I think I am sometimes getting discouraged by reasonably priced ones that never seem to trade...

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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Old March 23rd, 2013, 12:30 PM   #1100 (permalink)
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Some questions


Hello,
I am new to this forum and thread but somewhat experienced trader coming around to using this strategy for part of my portfolio. However I have few questions that I would appreciate help from Ron/others.

(1) What part of account is allocated to one commodity? Assuming account of 100k, and say a position of selling June 75 puts of CL for 5 cent at 300 initial margin - how many contracts will be sold?
(2) Where do I get delta of option? all free quote services that I know only give prices of options - not greeks...Also is there any screener that one can use (like many stock options screeners) for future options?
(3) Any adding to positions is done or not when it is going wrong way? If so how much? like after selling June 75 puts at 5 cents, Crude drops 2 dollar and now the same put is selling at 8 cents. The premise behind trade crude holding/going up seasonally is still valid and so why not use better prices? but then there is also higher risk and you are exceeding your allocation....
(4) Does any one uses rolling over of options taking heat? Rolling to further month/strike?

Thanks in advance.

Sam

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