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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,132 / 5,728
Last Reply:December 6th, 2016 (05:26 PM) Attachments:642

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Selling Options on Futures?

Old April 15th, 2013, 01:19 AM   #1331 (permalink)
Trading for Fun
Reno, USA
 
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Ron,

Given how the implied volatility has gone up on both /CL and /GC why would you not consider selling deep OTM calls now then get out when things settle down?

Just asking for my ongoing education.

Thanks

V

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Old April 15th, 2013, 01:51 AM   #1332 (permalink)
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ron99 View Post
Interesting that on Friday when GC was down a lot that OI gained 19k for the GC complex. Jun GC gained 15k. Prices don't appear to be dropping because of liquidation. Someone or someones are hammering it. but there is buying too.

GCm3 traded 10k times in 4 minutes on Sunday night. Lost $30. Something is going on.

CL OI gained 15k Friday. NG +25k.

These are times when I don't add more positions. Not making money on unused cash is better than losing money on cash that is being used.

China GDP numbers are out ... Annual growth was 7.7% in the January to March quarter, compared with 7.9% in the previous three months. Analysts had forecast a figure closer to 8%.

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Old April 15th, 2013, 08:19 AM   #1333 (permalink)
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ron99 View Post
Interesting that on Friday when GC was down a lot that OI gained 19k for the GC complex. Jun GC gained 15k. Prices don't appear to be dropping because of liquidation. Someone or someones are hammering it. but there is buying too.

GCm3 traded 10k times in 4 minutes on Sunday night. Lost $30. Something is going on.

CL OI gained 15k Friday. NG +25k.

These are times when I don't add more positions. Not making money on unused cash is better than losing money on cash that is being used.

Could be new long puts coming in to cover existing long futures, or Goldman Sachs customers who are taking GS downgrades seriously. GS has a history of predicting one thing and then trading in the opposite direction.
The Fed and other Central Banks are likely buyers too at bargain prices too.

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Old April 15th, 2013, 08:42 AM   #1334 (permalink)
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vmaiya73 View Post
Ron,

Given how the implied volatility has gone up on both /CL and /GC why would you not consider selling deep OTM calls now then get out when things settle down?

Just asking for my ongoing education.

Thanks

V

Cos you won't get more than $20 for 1820 and above June calls and the margins have likely gone up making for a miserly ROI. The price dropping has reduced call prices and volatility increased margins so a double whammy on ROI.

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Old April 15th, 2013, 09:02 AM   #1335 (permalink)
Market Wizard
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Futures Edge on FIO

britkid99 View Post
Could be new long puts coming in to cover existing long futures, or Goldman Sachs customers who are taking GS downgrades seriously. GS has a history of predicting one thing and then trading in the opposite direction.
The Fed and other Central Banks are likely buyers too at bargain prices too.

Sorry I should have stated that the OI change was just for futures.

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Old April 15th, 2013, 10:35 AM   #1336 (permalink)
Market Wizard
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Quoting 
Ron,

Given how the implied volatility has gone up on both /CL and /GC why would you not consider selling deep OTM calls now then get out when things settle down?

Just asking for my ongoing education.

Thanks

V


britkid99 View Post
Cos you won't get more than $20 for 1820 and above June calls and the margins have likely gone up making for a miserly ROI. The price dropping has reduced call prices and volatility increased margins so a double whammy on ROI.

What he said. It's a week too late to be selling calls.

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Old April 15th, 2013, 10:40 AM   #1337 (permalink)
Market Wizard
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Barrington View Post
China GDP numbers are out ... Annual growth was 7.7% in the January to March quarter, compared with 7.9% in the previous three months. Analysts had forecast a figure closer to 8%.

While the China numbers are bearish, GC crashed on Friday. Today's GC crash has more to do with what happened Friday and whatever triggered the new selling of futures.

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Old April 15th, 2013, 10:41 AM   #1338 (permalink)
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9:08 EDT - "These usually don't end very quickly," George Gero says of gold's
plunge. "Buyers may take a wait-and-see attitude" as gold futures crumble
nearly $200 a troy ounce in the space of two trading days. Gero should know.
He's been trading gold in New York since the futures contract was launched on
the same day US personal ownership of the metal was legalized in December 1974.
Now a vice president with RBC Capital Markets, Gero says: "In 40 years of
watching gold I have not seen anything like this."

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Old April 15th, 2013, 12:12 PM   #1339 (permalink)
Market Wizard
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OX raised GC margins from 20% over SPAN to 30% over. SI from 10% to 20%. NG from 20% to 30% over.

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Old April 15th, 2013, 12:13 PM   #1340 (permalink)
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To anyone interested, I am trying to sell off my remaining LONG May CL 78 Puts which were cover for a calender.
Got 3 away at 0.04 today and have orders in for 1 @ 0.05 and 2 @ 0.09

Thought these were doomed to expire worthless but drop in CL has sparked some interest.
Pretty good returns with just 2 more days left?

Have I traded with you again Ron? Anyway watch out if interested.

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