NexusFi: Find Your Edge


Home Menu

 





Selling Options on Futures?


Discussion in Options

Updated
      Top Posters
    1. looks_one ron99 with 2,221 posts (4,489 thanks)
    2. looks_two SMCJB with 346 posts (733 thanks)
    3. looks_3 kevinkdog with 341 posts (400 thanks)
    4. looks_4 myrrdin with 288 posts (408 thanks)
      Best Posters
    1. looks_one SMCJB with 2.1 thanks per post
    2. looks_two ron99 with 2 thanks per post
    3. looks_3 myrrdin with 1.4 thanks per post
    4. looks_4 kevinkdog with 1.2 thanks per post
    1. trending_up 1,934,752 views
    2. thumb_up 9,259 thanks given
    3. group 458 followers
    1. forum 7,370 posts
    2. attach_file 794 attachments




 
Search this Thread

Selling Options on Futures?

  #1821 (permalink)
 
Physicsman's Avatar
 Physicsman 
London + Great Britain
 
Experience: Master
Platform: Interactive Brokers, OptionsXpress, TradeMonster, RJO, AmiBroker, Wealthlab
Trading: Futures, Options, Equities
Posts: 19 since May 2013
Thanks Given: 85
Thanks Received: 25


ron99 View Post
Oh yeah if bid/ask is spread apart I usually try to work inbetween.

But like today on the KCU3 200C I just hit the bid for my full quantity because the price was fair and I wanted them before someone else got them. With that short DTE there aren't always a lot of bids. I suspect it was someone wanting out of shorts.

Now something further out in time you can play a little more with asks higher than the bids because those are probably somebody wanting to put on new positions. Like when we put on the KC 300 calls at 90+ DTE.

But using your example, if you put a full size order at 9, someone could sense you might come lower, because of your larger size order, and be ahead of you by bidding at 7 or 6. So in this example I would use the lower size at 9 and increase it when going to 8, 7, 6.

I suspected that showing my full size size might tip my hand and have other traders jump in front - glad to see you thought the same. It's one of the reasons why I asked the question in the first place. Appreciate you sharing your experience with us!

Sometimes on strikes that are just slightly closer to the money you see (market makers/bots/algos???) camped on a strike with large size. That made me think if I showed large size other traders might think I was a MM/bot/algo so I might be able to get away with showing full size.

Will experiment around to find what is most suitable for my style of trading.

Reply With Quote

Can you help answer these questions
from other members on NexusFi?
NexusFi Journal Challenge - April 2024
Feedback and Announcements
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
ZombieSqueeze
Platforms and Indicators
Request for MACD with option to use different MAs for fa …
NinjaTrader
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Retail Trading As An Industry
58 thanks
Battlestations: Show us your trading desks!
50 thanks
NexusFi site changelog and issues/problem reporting
47 thanks
GFIs1 1 DAX trade per day journal
32 thanks
What percentage per day is possible? [Poll]
31 thanks

  #1822 (permalink)
 
opts's Avatar
 opts 
NW Florida
 
Experience: Intermediate
Platform: OX and TOS
Trading: Futures Options, Stocks
Posts: 234 since Aug 2012
Thanks Given: 29
Thanks Received: 115


ron99 View Post
Trade Alert!

There are bids in Sep coffee calls which are only 23 DTE. For example 200s are bid 0.05.

Asleep at the wheel here...Insert pirate sound here -> Arrrrrrrrrrrrrrrrr!!!!!

Reply With Quote
  #1823 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785



opts View Post
Asleep at the wheel here...Insert pirate sound here -> Arrrrrrrrrrrrrrrrr!!!!!

Actually prices are better today for selling, so this time good thing you missed it.

Coffee is up on short covering. Total futures OI has barely moved. So shorts getting out and new shorts selling at these inflated numbers. That is why I'm not worried about it getting too high.

Last DCOT futures only report had specs net short 27k.

Futures are up because a cold front is moving through the coffee region in Brazil on Monday. Tuesday AM is predicted to get down to 34 degrees. Then warmer temps will follow.
10 Day Weather Forecast for Pocos de Caldas - weather.com


Quoting 
Temperatures average near to above normal Sunday but it should turn cooler or colder Monday and
Tuesday. Low temperatures may fall into the upper 30s F (3-4C) in the southern areas either Tuesday or Wednesday mornings. This means a slight chance for some patchy frost. Colder temperatures, lows 34-37F (1-3C) are expected in minor growing areas of northern Parana during this period. There is a higher risk of
frost in this area and a slight risk of a light freeze.

A turn to much cooler to colder weather is expected through coffee growing areas early next week. It appear likely that at least some frost may occur in minor growing areas of northern Parana with an outside risk of light freezing conditions. Major growing areas of Sao Paulo and Minas Gerais will also turn much cooler. The early call suggests lows may drip to near 3 C (37 F) in some southern areas. This would imply a chance for patchy frost.

The hard part is knowing if today is the high or will Friday have more short covering. I'm guessing it will. I should have figured that out before my trade alert yesterday.

But the weather forecast could change today or tomorrow and not show as cold temps. Who knows.

Started this thread Reply With Quote
  #1824 (permalink)
 
eudamonia's Avatar
 eudamonia 
Sacramento, CA
 
Experience: None
Platform: None
Broker: ADM and Sierra Charts
Trading: ES, CL
Posts: 315 since Jul 2010
Thanks Given: 308
Thanks Received: 449


ron99 View Post
The hard part is knowing if today is the high or will Friday have more short covering. I'm guessing it will. I should have figured that out before my trade alert yesterday.

But the weather forecast could change today or tomorrow and not show as cold temps. Who knows.

The good thing with selling OTM options is you don't have to be perfect on your market timing. Even the .05's from yesterday are a whopping good deal.

From a technical standpoint we are working back into a major resistance level at around the 137-140 area. I expect us to find resistance in that zone.

Visit my NexusFi Trade Journal Reply With Quote
  #1825 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785

Well that didn't last long. KC is now 7.00 below the high of today.

Some of the calls are now way over bid.

Started this thread Reply With Quote
  #1826 (permalink)
MJ888
Houston, Texas
 
Posts: 165 since Sep 2012
Thanks Given: 37
Thanks Received: 150

Wow! What a crazy move in coffee today. September hit a high of 134.00 only to retreat and give it ALL back to close a touch lower. NUTS!

Reply With Quote
  #1827 (permalink)
 Bakes 
Brisbane/Australia
 
Experience: Beginner
Platform: Jtrader.
Trading: Futures
Posts: 22 since Feb 2013
Thanks Given: 6
Thanks Received: 7

Yes i woke up to a nasty little surprise with my Sept and Oct coffee calls. Bugger i only sold the Oct calls early in the week too. I am thinking about adding to my Oct calls further out of the money than i was able to do earlier in the week.

Reply With Quote
  #1828 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,322 since Jun 2009
Thanks Given: 33,143
Thanks Received: 101,476


MJ888 View Post
Wow! What a crazy move in coffee today.

NUTS!

I think you meant BEANS!

Sent from my LG Optimus G Pro

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Reply With Quote
The following user says Thank You to Big Mike for this post:
  #1829 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785

The last 5 years in a row, CL inventories, after being down the prior 3-4 weeks, are up for the 3rd week of July.

So if you are wanting to sell CL calls I would do it before Tuesday PM's API inventory report.

Of course, past performance may not be indicative of future results.


Started this thread Reply With Quote
The following 2 users say Thank You to ron99 for this post:
  #1830 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785



ron99 View Post
Actually prices are better today for selling, so this time good thing you missed it.

Coffee is up on short covering. Total futures OI has barely moved. So shorts getting out and new shorts selling at these inflated numbers. That is why I'm not worried about it getting too high.

Last DCOT futures only report had specs net short 27k.

Futures are up because a cold front is moving through the coffee region in Brazil on Monday. Tuesday AM is predicted to get down to 34 degrees. Then warmer temps will follow.
10 Day Weather Forecast for Pocos de Caldas - weather.com



The hard part is knowing if today is the high or will Friday have more short covering. I'm guessing it will. I should have figured that out before my trade alert yesterday.

But the weather forecast could change today or tomorrow and not show as cold temps. Who knows.

Weather.com has raised the low temp forecast for Tuesday for Brazil from 34 to 36.

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





Last Updated on July 28, 2023


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
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.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts