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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,268 / 5,727
Last Reply:December 2nd, 2016 (12:40 PM) Attachments:642

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Selling Options on Futures?

Old March 27th, 2013, 01:30 PM   #1151 (permalink)
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vmaiya73 View Post
Im looking at /CLM3,

50 DTE, delta of -.02; credit of $335 (after commisions), reducing buying power effect by $2450--this is on TOS platform

any thoughts?

thx

V

What strike? How many positions? We need to know that to give you our thoughts.

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Old March 27th, 2013, 01:37 PM   #1152 (permalink)
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Oops sorry about that,

Looking at selling 5 contracts of /CLM3 at the 79 strike price. Credit of $335 and it now reduces buying power by $2667. Delta is still -.02

thx

V

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Old March 27th, 2013, 01:43 PM   #1153 (permalink)
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seems like where I'm at the margin is exchange minimum x 1.25. I'll have to re read the thread or use offsets in my trades. I had thought about selling the 105 calls and selling 82 puts. Decided to wait on the puts thinking this flag action on the chart would result in price coming down in the next while.

Risk is my middle name. Trying to think risk off.

Chartminder

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Old March 27th, 2013, 01:48 PM   #1154 (permalink)
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vmaiya73 View Post
Oops sorry about that,

Looking at selling 5 contracts of /CLM3 at the 79 strike price. Credit of $335 and it now reduces buying power by $2667. Delta is still -.02

thx

V

Those are OK now but I would trade out of them before the May crash.

The last 3 years CL has dropped an average of $12 the first week of May.

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Old March 27th, 2013, 01:50 PM   #1155 (permalink)
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chartminder View Post
seems like where I'm at the margin is exchange minimum x 1.25. I'll have to re read the thread or use offsets in my trades. I had thought about selling the 105 calls and selling 82 puts. Decided to wait on the puts thinking this flag action on the chart would result in price coming down in the next while.

Risk is my middle name. Trying to think risk off.

Chartminder

Empty pockets will be your middle name if you keep making trades like those.

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Old March 27th, 2013, 02:21 PM   #1156 (permalink)
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Ron

I thought you told me that the 3 day time decay coming over the easter weekend
was going to help if the Iranians don't get nuked

After all, all the aircraft carriers are in port on sequester. Maybe I'll look for my food stamp card and new phone at the mail box.

Where do you get that beta info anyways

Chartminder

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Old March 27th, 2013, 02:37 PM   #1157 (permalink)
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Forgot. we're talking money here and everybody is cereal.

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Old March 27th, 2013, 06:47 PM   #1158 (permalink)
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chartminder View Post
Forgot. we're talking money here and everybody is cereal.

The June 105 calls have 50 days until expiration and they are only $8 OTM. These are just too close to the underlying. Yes, there is a three day weekend approaching but there is still a lot of time left considering how near the underlying is. Premiums will go down more for those options expiring in April vs. those expiring in May.

Think about thing a little differently here...

Given the current chart for June CL which is in sort of an uptrend here I see resistance at right around 100; the first horizontal line. The second horizontal line is about 105, where your calls are. The vertical line is about where the 105's expire on May 16th. Now, given the current chart, the amount of time left, and if you had to either sell a 105 call or buy a 105 call what looks like the better decision right now?

I do think that the 100 area could be a problem to get through but if it does watch your position like a hawk. If I was going to sell June calls I would be looking at the 120 area but I would have to wait to see what happens around the 100 resistance area before I made a decision.

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Old March 28th, 2013, 12:25 AM   #1159 (permalink)
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opts

I appreciate hearing your comments.

Being primarily a daytrader, I haven't been too worried about the price. Oil has run up to $98 nearby month a couple times in the last few years. Over $98.50 and I'll be gone.

The margin stuff threw me off a bit. I thought that I might be like you guys and pocket the free money. HAHA
Tonight I'm starting to think that I might do the other side and just buy the far side, cheap options that you sell and if the swing is right, they will increase in value. Sort of like scaling in and out. I don't get the time decay but there is no fight with the option boss. (as far as I know). The scale idea is appropriate because as you get closer, you pay more. The swing trader has a cost to scale in and out as well. Too early, or too late has a cost. The option price swings a bit too.

I have too small an account to worry about time decay. $80 dollars over 25 days doesn't do much on 2 or 4 contracts. Yes, on 1000 contracts you are talking big.

Thanks to you and Ron for listening to me.

Roy


Last edited by chartminder; March 28th, 2013 at 12:35 AM.
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Old March 28th, 2013, 09:38 AM   #1160 (permalink)
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chartminder View Post
opts

I appreciate hearing your comments.

Being primarily a daytrader, I haven't been too worried about the price. Oil has run up to $98 nearby month a couple times in the last few years. Over $98.50 and I'll be gone.

The margin stuff threw me off a bit. I thought that I might be like you guys and pocket the free money. HAHA
Tonight I'm starting to think that I might do the other side and just buy the far side, cheap options that you sell and if the swing is right, they will increase in value. Sort of like scaling in and out. I don't get the time decay but there is no fight with the option boss. (as far as I know). The scale idea is appropriate because as you get closer, you pay more. The swing trader has a cost to scale in and out as well. Too early, or too late has a cost. The option price swings a bit too.

I have too small an account to worry about time decay. $80 dollars over 25 days doesn't do much on 2 or 4 contracts. Yes, on 1000 contracts you are talking big.

Thanks to you and Ron for listening to me.

Roy

Aha!...There's the piece that was missing..day trader and swing. If this is your method then selling the calls that close fits your method better than ours. The majority of us in this thread solely interested in letting time-decay do the work for us as far as banking premium is concerned. Being a swing/day trader you would have to sell a little closer. If I had the ability to monitor things intra day I'm sure I would be watching the mini 500 or t bonds. Feel free to post your insights for your swing option trades...

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