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Selling Options on Futures?
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Created: by ron99 Attachments:735

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Selling Options on Futures?

  #2051 (permalink)
Trading Apprentice
Florence-Italy
 
Futures Experience: Intermediate
Platform: eSignal-Get
Broker/Data: IB-RJO
Favorite Futures: Commodities-Index futures
 
Posts: 2 since May 2011
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Hi all,
Finally finished to catch up with past posts. Many thanks especially to Ron but also to all the other great traders for such a great thread.
This is the only thread I follow and have to say that it's much better than almost any book you can find out there.
Currently I'm trading futures and some credit spreads on SPX or stocks, hope to put on my first option selling trade before end of the year.
I post a file in which I've collected bites and chuncks of what I've found relevant to me during the reading. Use it as you please, in my intention it should be a sort of reference manual or workbook for further study or thoughts about the subject.

Attached Files
Register to download File Type: docx Ron's Thread.docx (85.8 KB, 581 views)
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  #2052 (permalink)
Elite Member
St. Augustine Florida
 
Futures Experience: Beginner
Platform: IB and Option Vue for options. NJ and IQFeed for mini day trading
Favorite Futures: ES
 
Blister's Avatar
 
Posts: 33 since Jun 2013
Thanks: 0 given, 10 received

All of these ag commodities give me the shakes. In college, I took a class from a living legend in ag commodity trading. He scared us all out of speculating. Hedging yes, but no speculating.

That aside, I've always felt it was difficult to fix a directional options play. So unless I am sure about the outcome I bail out.

I hope you have worthless options too



kevinkdog View Post
It is always hard to know what to do in the heat of the moment. 6 months from now, it will be easy to look back and see what we should have done.

I'll just follow Ron's exit rules, and if it says "Get OUT!!!" I will do just that.


_____
John
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  #2053 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
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Favorite Futures: futures
 
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Blister View Post
All of these ag commodities give me the shakes. In college, I took a class from a living legend in ag commodity trading. He scared us all out of speculating. Hedging yes, but no speculating.

That aside, I've always felt it was difficult to fix a directional options play. So unless I am sure about the outcome I bail out.

I hope you have worthless options too

That is the beauty of this method that @ron99 has graciously shared. You don't have to pick direction - you just have to try to pick where it is not going to go a large amount in a short time. So, there are a lot of ways to make money, and only one way to lose (a large move, in a short time period, in the direction you don't want).

To me, the method is not speculating, at least compared to other directional stuff I do.

I'm aiming for 50% annual return, and so far since Feb I have had one losing trade (and one I rolled, but will still make money overall).

I assume your professor became a legend because of speculating?

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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  #2054 (permalink)
Elite Member
St. Augustine Florida
 
Futures Experience: Beginner
Platform: IB and Option Vue for options. NJ and IQFeed for mini day trading
Favorite Futures: ES
 
Blister's Avatar
 
Posts: 33 since Jun 2013
Thanks: 0 given, 10 received

Congratulations Kevin. That is a phenomenal return.

I fully understand Ron's method. No worries there.


kevinkdog View Post
That is the beauty of this method that @ron99 has graciously shared. You don't have to pick direction - you just have to try to pick where it is not going to go a large amount in a short time. So, there are a lot of ways to make money, and only one way to lose (a large move, in a short time period, in the direction you don't want).

To me, the method is not speculating, at least compared to other directional stuff I do.

I'm aiming for 50% annual return, and so far since Feb I have had one losing trade (and one I rolled, but will still make money overall).

I assume your professor became a legend because of speculating?


_____
John
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  #2055 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
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Iridium View Post
Hi all,
Finally finished to catch up with past posts. Many thanks especially to Ron but also to all the other great traders for such a great thread.
This is the only thread I follow and have to say that it's much better than almost any book you can find out there.
Currently I'm trading futures and some credit spreads on SPX or stocks, hope to put on my first option selling trade before end of the year.
I post a file in which I've collected bites and chuncks of what I've found relevant to me during the reading. Use it as you please, in my intention it should be a sort of reference manual or workbook for further study or thoughts about the subject.


I always wished there was a condensed version of this thread and now we have one. Thanks for your hard work.

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  #2056 (permalink)
Trading Apprentice
Florence-Italy
 
Futures Experience: Intermediate
Platform: eSignal-Get
Broker/Data: IB-RJO
Favorite Futures: Commodities-Index futures
 
Posts: 2 since May 2011
Thanks: 50 given, 17 received


ron99 View Post

I always wished there was a condensed version of this thread and now we have one. Thanks for your hard work.

Welcome! I know it's really "raw" and still have to work on it, but it's a frame to start.
Actually I've got the idea to post from you, I was already making it to save time while wandering through the thread.

Question: anyone using Tradestation for option selling? Any comments? I already have IB and RJO, only the latter uses span margins, but the platform is nothing special.

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  #2057 (permalink)
10 out of 10
Sacramento, CA
 
Futures Experience: None
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Broker/Data: OX and DeCarley
Favorite Futures: Futures options
 
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Posts: 310 since Jul 2010
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I've been looking at January Sugar short strangle since the seasonals/fundamentals seem well positioned to go sideways for the next couple months. Sugar tends to top out around mid-September until about mid December.

Something like: SBF414.5P and SBF423C (liquidity is a bit low admittedly). OX shows about 2.8% monthly ROI (although I know their calcs are wrong).

Thoughts?

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  #2058 (permalink)
Elite Member
St. Augustine Florida
 
Futures Experience: Beginner
Platform: IB and Option Vue for options. NJ and IQFeed for mini day trading
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Blister's Avatar
 
Posts: 33 since Jun 2013
Thanks: 0 given, 10 received

Do a Google search on sugar contract default. Might be interesting.

Sent from mobile phone

_____
John
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  #2059 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
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Big Mike's Avatar
 
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ron99 View Post

I always wished there was a condensed version of this thread and now we have one. Thanks for your hard work.

I also encourage any member (Elite Member) to maintain and update post #2 of any thread, it is the "Quick Summary" post. All Elite Members have an "edit" button where they can freely add important links and such to post #2 of any thread on the site (most any thread anyway).

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  #2060 (permalink)
Market Wizard
Cleveland, OH
 
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OX increased the extra they charge for margin above SPAN on

CL from 20% to 30%
HO from 30% to 40%

They decreased GC from 10% to 0% (but ROI% is still <2.5).

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