Selling Options on Futures? - Options on Futures | futures io social trading
futures io futures trading


Selling Options on Futures?
Updated: Views / Replies:623,060 / 5,933
Created: by ron99 Attachments:669

Welcome to futures io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.


You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike

Reply
 669  
 
Thread Tools Search this Thread
 

Selling Options on Futures?

  #2061 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,243 since Jul 2012
Thanks: 1,050 given, 4,081 received


ron99 View Post
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).

Thanks! Do they tell you this via e-mail or some other method, or do you just use the SPAN program to compare required margins?

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
 
  #2062 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,490 since Jul 2011
Thanks: 701 given, 4,236 received
Forum Reputation: Legendary


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 posted the link to your Word doc in the page one Quick Summary. If you update the doc the link in the Quick Summary will need to be updated.

Reply With Quote
 
  #2063 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,490 since Jul 2011
Thanks: 701 given, 4,236 received
Forum Reputation: Legendary



kevinkdog View Post
Thanks! Do they tell you this via e-mail or some other method, or do you just use the SPAN program to compare required margins?

I keep track of SPAN margins and OX margins on a spreadsheet. Daily I compare the two using a Watch List on OX, which has all of the front month contracts for each commodity, with my SPAN numbers. I use the email notices I get from CME and ICE to keep track of SPAN margin changes.

Unfortunately OX doesn't always keep the margin column on the Watch List and on the Quote Detail page up to date. It may be 1-2 days behind. So I may find out after the fact. The Trade Calc is always up to date.

Reply With Quote
The following 2 users say Thank You to ron99 for this post:
 
  #2064 (permalink)
Trading Apprentice
Singapore
 
Futures Experience: Intermediate
Platform: Rtrader,Zaner 360
Broker/Data: Deep Discount Trading/Rithmic,DeCarley/Gain
Favorite Futures: Future Options
 
Posts: 35 since Sep 2012
Thanks: 46 given, 49 received

Option Calculator

Dear All,

Thanks for a great threat, I've been selling options for quite some time, but have really learnt a ton of new things here. thanks to all that have contributed.

A few months back I put together a super simple trade calculator based on some of the common rules of this threat plus a few of my own, I find I now use it to screen every trade I do. I'm amazes at how many trades I would have taken before that now show up as 'no goes' in the calc. I key the data in from OX trade calculator.

Basically key in the, contract, premium, initial margin, current date and expiry date, and it spits out DTE, rate of return till expiry ( I base that on 65% reserve cash, not 2/3 like some others), rate of return for 30 days. Above 2.5% shows green, below shows red.

I also key in the delta, above 0.05 shows red, below green, and it provides a risk return factor (RRF), which is basically the rate of return for 30 days / delta. What I'm looking for here is to get the best return at the lowest delta. I'm still tinkering with what determines an acceptable RRF, at the moment I've settled with above 1, seems to work good. The higher the figure the better.

Short DOTM CL puts in particular give great RRF's, and seem to be a staple sell for many here, with good reason. I used to sell a lot of currency options, but have avoided them recently as the risk return factor is actually generally very poor.

I'm looking for trades showing all greens. So far keeping me more on the straight and narrow.

Maybe some of you can find it useful or give you some ideas of your own for creating helpful little trading tools customized to the way you trade.

Attached Files
Register to download File Type: xlsx Option Calculator.xlsx (12.3 KB, 125 views)
Reply With Quote
The following 15 users say Thank You to Harvard16 for this post:
 
  #2065 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,490 since Jul 2011
Thanks: 701 given, 4,236 received
Forum Reputation: Legendary

Harvard16, Excellent idea.

One thing to consider. The margin at OX may not equal the margin at where you are trading. Unless of course you are only trading at OX.

Reply With Quote
 
  #2066 (permalink)
Trading Apprentice
Singapore
 
Futures Experience: Intermediate
Platform: Rtrader,Zaner 360
Broker/Data: Deep Discount Trading/Rithmic,DeCarley/Gain
Favorite Futures: Future Options
 
Posts: 35 since Sep 2012
Thanks: 46 given, 49 received

Ron, thanks, as you'll know SPAN margin calc across a wide variety of contracts can be a bit of dark science.

I try and compare margin requirements by checking the difference in margin the next day on the statements against the initial OX calc, when putting on new positions, but of course I know that is not accurate as the other positions margins are also altering.

I do track my average margin efficiency , with OEC its 26.3% and with Crossland it's 23.5%, both quite close , in other words for every $1 premium collected I'm putting up about $4 in margin. I find that useful to quickly eyeball what size I'm looking to sell when excess margin becomes available.

I still maintain a small account with OX, unfortunately non- US traders don't get the better commission rates, so can't really compare margins better. But as a general guide for me it works fine.

One, interesting thing I've noted since selling further out than I used to the average margin efficiency has dropped about 2-3% on average.

Reply With Quote
The following user says Thank You to Harvard16 for this post:
 
  #2067 (permalink)
Trading for Fun
Lancashire UK
 
Futures Experience: Intermediate
Platform: Tradestation, Interactive Brokers, OX
Favorite Futures: ES Z CL EURJPY
 
Posts: 52 since Jan 2013
Thanks: 42 given, 30 received


Harvard16 View Post
I still maintain a small account with OX, unfortunately non- US traders don't get the better commission rates, so can't really compare margins better.

It is possible for non-US traders to negotiate better comms with OX. I told them I wanted to move from IB because the margins are better at OX, but they would have to come closer to IB's $2.32. They put me on the standard US rate of 3.50 (+ fees).


Chris

Reply With Quote
The following user says Thank You to MGBRoadster for this post:
 
  #2068 (permalink)
Trading for Fun
Huntsville AL/USA
 
Futures Experience: Intermediate
Platform: optionsXpress
Favorite Futures: Options on Futures
 
Posts: 54 since May 2012
Thanks: 80 given, 26 received

OX raising Margin by 45% on my IRA vs Reg

It appears that OX started requiring 45% more margin across the board on my IRA account vs my regular account. Is this just me or is anyone else seeing this?

Reply With Quote
 
  #2069 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,490 since Jul 2011
Thanks: 701 given, 4,236 received
Forum Reputation: Legendary


Raven View Post
It appears that OX started requiring 45% more margin across the board on my IRA account vs my regular account. Is this just me or is anyone else seeing this?

Not in my accounts. Just checked now.

Reply With Quote
 
  #2070 (permalink)
Trading for Fun
Huntsville AL/USA
 
Futures Experience: Intermediate
Platform: optionsXpress
Favorite Futures: Options on Futures
 
Posts: 54 since May 2012
Thanks: 80 given, 26 received



ron99 View Post
Not in my accounts. Just checked now.

I didn't notice a change in my buying power. I noticed it when I was trying to place the exact same trade in both accounts.

Reply With Quote

Reply



futures io > > > > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

Introducing iSystems with Stage 5 Trading

Apr 27

FIO Journal Challenge featuring NinjaTrader ($2,000+ of prizes)

May

Prototyping Python Strategies (part 2) w/Ran Aroussi

Elite only

Ask Me Anything w/Raymond Deux @ NinjaTrader

May 3

An Afternoon with FIO member Softsoap

Elite only
 

Machine Learning & Data Mining Bias w/Kris Longmore @ Robot Wealth

Elite only

Brannigan Barrett (TBA)

Elite only

FIO member Gomi (TBA)

Elite only

FuturesTrader71 (TBA)

Elite only

EasyLanguage Programming w/Chris @ ABC Trading Group

Elite only

Portfolio Diversification w/Brendon Delate

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Crude Oil (CL) futures inverse pairing options Big Mike Commodities Futures Trading 8 December 12th, 2013 11:00 AM
Recommend futures, options Broker? sam1197 Brokers and Data Feeds 17 March 27th, 2013 12:42 AM
Trading Futures with options as protection Gooffy2010 Commodities Futures Trading 6 October 2nd, 2012 04:55 PM
Selling Njniatrader sam1197 NinjaTrader 22 June 28th, 2012 12:40 PM
Zen-Fire Futures options tici88 Brokers and Data Feeds 1 July 30th, 2011 09:16 AM


All times are GMT -4. The time now is 01:54 PM.

no new posts
Page generated 2017-04-28 in 0.14 seconds with 21 queries on phoenix via your IP 54.80.58.75