Selling Options on Futures? (Page 219) - Options on Futures | futures.io
futures.io futures trading
 

Go Back   futures.io

> Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures


Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,280 / 5,728
Last Reply:December 6th, 2016 (05:26 PM) Attachments:642

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
 642  
 
Thread Tools Search this Thread

Selling Options on Futures?

Old October 9th, 2013, 10:40 AM   #2181 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,195 since Jul 2012
Thanks: 1,004 given, 3,969 received

OK, Correct Now

I think I corrected my table. For those of you who do not know, the OEX calculator does spread margins incorrectly. There is a work around, and here is an example:

CLZ373P/135P @turch recommendation, a VERY good one!):

Per OEX calculator: Margin for 1 spread = $978 (wrong)
Per OEX calculator: Margin for 2 spreads = $1098 (wrong)

But, if you take the difference = $1098 - $978 = 120 you get the correct margin for 1 spread.


So, based on that, I get:

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



So, at @turch 's recommendation gives the best ROI (after costs, assuming you want to keep delta below .04), and is the furthest out of money. The trick will be getting fills, as the 73P is currently 0.00/0.04 and the 135C is 0.01/0.02. You probably won't get .02 for each leg.

Thanks to @MGBRoadster for questioning my (wrong) calculation.


edit: the other caveat here is that the prices may be current, but the margins are as of last night. Given today's drop, that will change the margin requirements.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread

Last edited by kevinkdog; October 9th, 2013 at 10:45 AM.
Reply With Quote
     

Old October 9th, 2013, 10:54 AM   #2182 (permalink)
Trading Apprentice
Adelaide Australia
 
Futures Experience: Beginner
Platform: OX
Favorite Futures: Futures options
 
Posts: 15 since Apr 2013
Thanks: 83 given, 10 received


kevinkdog View Post
I think I corrected my table. For those of you who do not know, the OEX calculator does spread margins incorrectly. There is a work around, and here is an example:

CLZ373P/135P @turch recommendation, a VERY good one!):

Per OEX calculator: Margin for 1 spread = $978 (wrong)
Per OEX calculator: Margin for 2 spreads = $1098 (wrong)

But, if you take the difference = $1098 - $978 = 120 you get the correct margin for 1 spread.


So, based on that, I get:

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



So, at @turch 's recommendation gives the best ROI (after costs, assuming you want to keep delta below .04), and is the furthest out of money. The trick will be getting fills, as the 73P is currently 0.00/0.04 and the 135C is 0.01/0.02. You probably won't get .02 for each leg.

Thanks to @MGBRoadster for questioning my (wrong) calculation.


edit: the other caveat here is that the prices may be current, but the margins are as of last night. Given today's drop, that will change the margin requirements.

I was just suggesting that Blueroo should take a look further OTM next time, based on the example I gave.

Reply With Quote
     
The following user says Thank You to turch for this post:
     

Old October 9th, 2013, 11:18 AM   #2183 (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



kevinkdog View Post
the other caveat here is that the prices may be current, but the margins are as of last night. Given today's drop, that will change the margin requirements.

I think Ron has said that if you use the settlement price with last night's margin then that should produce a more accurate ROI. The settlement prices for those three spreads would be:
85P/120C 0.17
90P/115C 0.40
73P/135C 0.04

Reply With Quote
     

Old October 9th, 2013, 11:26 AM   #2184 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,195 since Jul 2012
Thanks: 1,004 given, 3,969 received


MGBRoadster View Post
I think Ron has said that if you use the settlement price with last night's margin then that should produce a more accurate ROI. The settlement prices for those three spreads would be:
85P/120C 0.17
90P/115C 0.40
73P/135C 0.04

Using those settlement values, I get this:

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
     

Old October 9th, 2013, 07:02 PM   #2185 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received

Futures Edge on FIO

Are you a NinjaTrader user?

 

eudamonia View Post
I'm trying to find the SPAN calculator on the CME website. Is this the correct link?

Ordering PC-SPANŽ

Here is the SPAN page.
http://www.cmegroup.com/clearing/risk-management/

Yes it looks to be the $10 program. I paid $500 8 years ago for it.

Good luck using it. It looks like a program from the 80s that hasn't been updated.

Reply With Quote
     

Old October 9th, 2013, 07:06 PM   #2186 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received

CC margins up slightly. CT margins down about 40%.

Reply With Quote
     

Old October 9th, 2013, 08:14 PM   #2187 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received

Looks like OX attempted to fix the Trade Calc. The P&L chart now has a line but the P&L prices are wrong. I'm looking at a CL chart and instead of $20 it has $0.20.

Spreads are still wrong.

Reply With Quote
     

Old October 9th, 2013, 08:37 PM   #2188 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received


kevinkdog View Post
Using those settlement values, I get this:

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

You might sell Dec 75 puts and 130 calls for .02 each. Tomorrow's margin for that spread at OX is 140.40 (SPAN 117). That's a 5.6% monthly ROI at OX. 6.8% at SPAN minimum margin. $3.50 commission rate.

Reply With Quote
     

Old October 9th, 2013, 08:59 PM   #2189 (permalink)
Trading Apprentice
Adelaide Australia
 
Futures Experience: Beginner
Platform: OX
Favorite Futures: Futures options
 
Posts: 15 since Apr 2013
Thanks: 83 given, 10 received


ron99 View Post
You might sell Dec 75 puts and 130 calls for .02 each. Tomorrow's margin for that spread at OX is 140.40 (SPAN 117). That's a 5.6% monthly ROI at OX. 6.8% at SPAN minimum margin. $3.50 commission rate.

Hey Ron,
Have you been selling ES like Karen? If so do you think it was possible to turn $700K into $41 mill. in around 2 years.
I still am wondering how she did it.

Reply With Quote
     

Old October 9th, 2013, 09:18 PM   #2190 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received



turch View Post
Hey Ron,
Have you been selling ES like Karen? If so do you think it was possible to turn $700K into $41 mill. in around 2 years.
I still am wondering how she did it.

I was selling ES until a month ago. Quit selling ES puts because of impending gov shutdown and debt ceiling stuff. Good thing I did. They haven't moved for a month.

I don't have the numbers in front of me but it was more than 2 years and she did have deposits in that time frame.
Trader - Made $41 Million Profit in 3 Years Option Trading - YouTube

So we don't know her ROR%. If she didn't have any deposits to go from 700k to 41 million profit in 3 years is about 300% per year. Doubtful for just selling options.

But they did say her balance was 80 million. So 80 mil minus 41 mil minus 700k is 38.3 mil in deposits.

I doubt she got the 38.3 mil in deposits all at once but for now let's say she did. So she took 38.3 mil plus 700k which totals 39 mil and made 41 mil profit in 3 years.

So that is 27% per year. Now that is doable selling options.

We need to know when and how much the deposits were made into the account to get the true ROR.


Last edited by ron99; October 9th, 2013 at 10:00 PM.
Reply With Quote
     
The following 3 users say Thank You to ron99 for this post:
     

Reply



futures.io > Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



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

NinjaTrader 8: Features and Enhancements, Tips and Tricks

Dec 6
 

Al Brooks: Stop Losing when a Good Trade goes Bad, Correcting Mistakes

Elite only
 

Trading Technologies: Algo Design Lab hands-on

Dec 13
     

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 12:00 PM
Recommend futures, options Broker? sam1197 Brokers and Data Feeds 17 March 27th, 2013 01:42 AM
Trading Futures with options as protection Gooffy2010 Commodities Futures Trading 6 October 2nd, 2012 05:55 PM
Selling Njniatrader sam1197 NinjaTrader 22 June 28th, 2012 01:40 PM
Zen-Fire Futures options tici88 Brokers and Data Feeds 1 July 30th, 2011 10:16 AM


All times are GMT -4. The time now is 02:06 PM.

Copyright © 2016 by futures.io. 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.
 
no new posts
Page generated 2016-12-08 in 0.16 seconds with 20 queries on phoenix via your IP 54.163.129.96