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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 28th, 2013, 11:16 AM   #1161 (permalink)
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Getting a nice quiet pullback in wheat before the 11 CST crop report. I suspect we will see some increased volatility and higher premiums after 11. Might be a good time to sell some more calls.

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Old March 28th, 2013, 01:38 PM   #1162 (permalink)
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Commissions and fees

I started about a year ago selling options on futures. The commission my trader was initially charging was $22 per option plus floor fees per side. A ton of money. ....I have been negotiating the commissions down as I get some knowledge and sell more options to the point that I am paying now $ 5 plus floor fees per side. Last month I sold or bought back 27 options for a total of $416 in commissions and fees. Still too much money, according to what I read here.

I went Option Express but they donīt take accounts from Colombia. Question: Do you have any suggestions as to where or how can I reduce the commissions and fees I am paying at the moment?

Thanks for the feedback.

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Old March 28th, 2013, 01:55 PM   #1163 (permalink)
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alfredoe View Post
I started about a year ago selling options on futures. The commission my trader was initially charging was $22 per option plus floor fees per side. A ton of money. ....I have been negotiating the commissions down as I get some knowledge and sell more options to the point that I am paying now $ 5 plus floor fees per side. Last month I sold or bought back 27 options for a total of $416 in commissions and fees. Still too much money, according to what I read here.

I went Option Express but they donīt take accounts from Colombia. Question: Do you have any suggestions as to where or how can I reduce the commissions and fees I am paying at the moment?

Thanks for the feedback.

When it comes to strictly fees, in my opinion, Interactive Brokers has the lowest fees. My rate was $2.32 FLAT for any commodities option traded. There were no platform fees, overnight fees, or exchange fees. Just one flat $2.32

But the catch with Interactive Brokers is that their margin requirements are much much much higher than most places, probably one of the highest I've seen, at least here in the United States.

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Old March 28th, 2013, 01:58 PM   #1164 (permalink)
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Wow! Wheat down 50 cents . I remember when the limit moves were 12 cents. Haven't read the crop report but I can guess what it said.....

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Old March 28th, 2013, 02:18 PM   #1165 (permalink)
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When it comes to strictly fees, in my opinion, Interactive Brokers has the lowest fees. My rate was $2.32 FLAT for any commodities option traded. There were no platform fees, overnight fees, or exchange fees. Just one flat $2.32

But the catch with Interactive Brokers is that their margin requirements are much much much higher than most places, probably one of the highest I've seen, at least here in the United States.

Thanks MJ88, I will check with Interactive Brokers....

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Old March 28th, 2013, 03:47 PM   #1166 (permalink)
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Yeah didn't get a chance to add to my wheat calls sadly.

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Old March 28th, 2013, 05:47 PM   #1167 (permalink)
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Cotton margin rising 23% on Monday.

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Old March 29th, 2013, 01:25 PM   #1168 (permalink)
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Beginning April 8, electronic and floor trading hours for CBOT Corn, Soybeans, Wheat, Soybean Meal, Soybean Oil, Rough Rice, Oats, and KCBT Wheat futures and options, plus all related CBOT and KCBT calendar spread options and inter-commodity spread options, will be amended as follows:

Sunday to Friday, electronic trading from 7:00 p.m. to 7:45 a.m. CT
Monday to Friday, break in electronic trading from 7:45 a.m. to 8:30 a.m. CT
Monday to Friday, floor and CME Globex trading from 8:30 a.m. to 1:15 p.m. CT

Daily settlements for CME Globex and floor trading of these products will be based on market activity at or around 1:15 p.m. CT each day.

CME Group Announces Reduced Grain and Oilseed Trading Hours in Response to Customer Outreach - CME Investor Relations

So closed for 45 minutes in the am and closing earlier in the day.

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Old March 29th, 2013, 02:54 PM   #1169 (permalink)
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Very interesting videos of a VERY successful option seller. 30-50% ROR per year.

Host is founder of TOS. Tastytrade video series.

Part 1. 24 minutes
Trader - made $XX profit in 3 years option trading - YouTube

Part 2. 51 minutes
OPTION TRADER makes $XX PROFIT in the NDX, SPX & RUT - Her STORY Uncovered - YouTube

Summary is that she sells stock index options about 17% OTM at 56 DTE. About 250-270 points on ES puts. That looks to be about a 0.0200 Delta or lower.

Only one losing month the last 2 years.

Definitely worth your time to watch. If this doesn't make you excited about selling options nothing will.

Thanks to @lrfsdad for linking to these videos in another thread.


Last edited by ron99; March 29th, 2013 at 06:06 PM.
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Old March 30th, 2013, 10:43 AM   #1170 (permalink)
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ron99 View Post
Very interesting videos of a VERY successful option seller. 30-50% ROR per year.

Host is founder of TOS. Tastytrade video series.

Part 1. 24 minutes
Trader - made $XX profit in 3 years option trading - YouTube

Part 2. 51 minutes
OPTION TRADER makes $XX PROFIT in the NDX, SPX & RUT - Her STORY Uncovered - YouTube

Summary is that she sells stock index options about 17% OTM at 56 DTE. About 250-270 points on ES puts. That looks to be about a 0.0200 Delta or lower.

Only one losing month the last 2 years.

Definitely worth your time to watch. If this doesn't make you excited about selling options nothing will.

Thanks to @lrfsdad for linking to these videos in another thread.

Everyone in this thread needs to watch these videos.


OK..So, thinking in terms of the SPX:

Her initial starting point is 100 points away then 12% further out from that. (5% probability of going ITM)
Sell side is PUT oriented but will look at CALL premiums from time to time
About 56 DTE
15% profit target per trade (for the 56 day period)
Stick with the plan

The only thing that raises a flag is the high % or capital used...up to 75%. Leaves only 25% cash on hand.

I traded my first corn contract about 18 years ago. I would hate to start my trading career selling premium uncovered and not knowing the risks, emotions, money money management, etc. that are involved with it much less any trading method. Read read read...Learn learn learn.

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