Selling Options on Futures? (Page 220) - 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:568,200 / 5,727
Last Reply:December 2nd, 2016 (12:40 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, 11:38 PM   #2191 (permalink)
Elite Member
Georgia, US
 
Futures Experience: None
Platform: Various
Favorite Futures: Various
 
josh's Avatar
 
Posts: 4,898 since Jan 2011
Thanks: 5,143 given, 11,194 received


kevinkdog View Post
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.

That's my question with these far OTM options--how many CLZ373P have even traded in the last couple of weeks?

Reply With Quote
     

Old October 9th, 2013, 11:55 PM   #2192 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,194 since Jul 2012
Thanks: 1,004 given, 3,965 received


josh View Post
That's my question with these far OTM options--how many CLZ373P have even traded in the last couple of weeks?

15 traded today at .02. CL is one of the most active in options.

It is sometimes difficult to get filled, but it is not impossible. I sometimes have orders open for a few weeks, and then the price moves and I get filled.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
     
The following user says Thank You to kevinkdog for this post:
     

Old October 10th, 2013, 12:30 AM   #2193 (permalink)
Trading for Fun
Brisbane, Queensland, Australia
 
Futures Experience: Intermediate
Platform: OX, Z360, Excel
Broker/Data: DeCarley
Favorite Futures: Futures and Future Options
 
Posts: 121 since Aug 2013
Thanks: 75 given, 96 received

Sleeping at night!



turch View Post
Neither, how can you sleep at night being 11.71 OTM?
You may get lucky and have a couple successful trades, but it's just a matter of time before you get wiped out.
What's wrong with CLZ3135C @ .02 x 50 = $1000
CLZ373P @ .02 x 50 = $1000
Margin = $6864 Comm.= $350
Same DTE. Nearly the same ROI as the CLZ385p & CLZ3120C only I would sleep a lot better.

Turch, I sleep pretty well. I have been doing strangles $15 either side of the ATM for a few years. Yes there are times when it is difficult. I would say out of 12 months I have a minimum of 9 clear easy wins. The other months have been a great teacher. This experience have taught me to approach protection in a different way. Rather than roll I trade futures or sometime becoming a buyer of options. I don't roll anything anymore. Over the past 12 months I have only had one strangle where I have my sold leg move to ATM but I also had long options and for this month I came out a little ahead once I sold everything out. One of the things that does help me doing this is DTE. I am more a 35 DTE guy so once I get the first 10 days out of the way it is much easier.

All this said I consider myself a perpetual student. I am learning and re-evaluating what I do as a direct result of this forum. And on that note many many thanks to all. Most recently members have helped with with my seasonal study and development and now more so with the CL strangle. I have a list of other issues I wish to seek the forums feedback on but that will come in time.

Being honest I am still struggling with the idea of DOTM and 60 DTE. So rather than comment from the sidelines I am placing small allocation trades using this methodology.

I have this idea (right or wrong) that DOTM and 60 DTE when in the face of a threatening move will have me with 50 lots sold at .02 with 50 lots at .1 and still 30 DTE.

Reply With Quote
     

Old October 10th, 2013, 02:11 AM   #2194 (permalink)
Trading Apprentice
Adelaide Australia
 
Futures Experience: Beginner
Platform: OX
Favorite Futures: Futures options
 
Posts: 15 since Apr 2013
Thanks: 83 given, 10 received


BlueRoo View Post
Turch, I sleep pretty well. I have been doing strangles $15 either side of the ATM for a few years. Yes there are times when it is difficult. I would say out of 12 months I have a minimum of 9 clear easy wins. The other months have been a great teacher. This experience have taught me to approach protection in a different way. Rather than roll I trade futures or sometime becoming a buyer of options. I don't roll anything anymore. Over the past 12 months I have only had one strangle where I have my sold leg move to ATM but I also had long options and for this month I came out a little ahead once I sold everything out. One of the things that does help me doing this is DTE. I am more a 35 DTE guy so once I get the first 10 days out of the way it is much easier.

All this said I consider myself a perpetual student. I am learning and re-evaluating what I do as a direct result of this forum. And on that note many many thanks to all. Most recently members have helped with with my seasonal study and development and now more so with the CL strangle. I have a list of other issues I wish to seek the forums feedback on but that will come in time.

Being honest I am still struggling with the idea of DOTM and 60 DTE. So rather than comment from the sidelines I am placing small allocation trades using this methodology.

I have this idea (right or wrong) that DOTM and 60 DTE when in the face of a threatening move will have me with 50 lots sold at .02 with 50 lots at .1 and still 30 DTE.

"When in the face of a threatening move", I would rather have 50 lots $30 OTM than 10 lots $11 OTM.
When I sell 50 @ .02 it is usually with less than 40 DTE. If I'm selling 60 DTE I like to get more premium.
There are many ways to skin a cat, this forum is proof of that. We all have the same guidelines, it comes down to interpretation and personality.It's good to bounce different ideas around and get opinions that's what makes this forum great.
Cheers.

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

Old October 10th, 2013, 02:22 AM   #2195 (permalink)
Trading for Fun
Brisbane, Queensland, Australia
 
Futures Experience: Intermediate
Platform: OX, Z360, Excel
Broker/Data: DeCarley
Favorite Futures: Futures and Future Options
 
Posts: 121 since Aug 2013
Thanks: 75 given, 96 received

Is the margin listed in the OX trade calculator correct?

Futures Edge on FIO
Sorry, but I am confused. I have always taken the margin listed in the OX trade calculator as being correct.

If this is not the case how do you determine the correct margin?

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

Old October 10th, 2013, 02:29 AM   #2196 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,194 since Jul 2012
Thanks: 1,004 given, 3,965 received


BlueRoo View Post
Sorry, but I am confused. I have always taken the margin listed in the OX trade calculator as being correct.

If this is not the case how do you determine the correct margin?

It is usually correct, except when looking at spread(multi-leg) positions. A few posts earlier I give an example.

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 10th, 2013, 04:47 AM   #2197 (permalink)
Elite Member
Brisbane/Australia
 
Futures Experience: Beginner
Platform: Jtrader.
Favorite Futures: Futures
 
Posts: 22 since Feb 2013
Thanks: 6 given, 7 received

BlueRoo/Turch,

A penny for your thoughts. I have followed Ron's methods fairly closely over the last year for very good results. I guess my main deviation from Ron's trading is where i find it worthwhile to make a trade. From memory Ron is more than willing to sell CL @ 0.02-3, whereas for me, because of our higher commission charges here in Aust i do not see that as worthwhile. I generally look to sell most options at around 0.05-6. Do you guys generally look at slightly higher Premium per option than the guys in the US because of our higher commission charges?

Regards,

Bakes

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

Old October 10th, 2013, 09:21 AM   #2198 (permalink)
Trading Apprentice
Adelaide Australia
 
Futures Experience: Beginner
Platform: OX
Favorite Futures: Futures options
 
Posts: 15 since Apr 2013
Thanks: 83 given, 10 received


Bakes View Post
BlueRoo/Turch,

A penny for your thoughts. I have followed Ron's methods fairly closely over the last year for very good results. I guess my main deviation from Ron's trading is where i find it worthwhile to make a trade. From memory Ron is more than willing to sell CL @ 0.02-3, whereas for me, because of our higher commission charges here in Aust i do not see that as worthwhile. I generally look to sell most options at around 0.05-6. Do you guys generally look at slightly higher Premium per option than the guys in the US because of our higher commission charges?

Regards,

Bakes

I opened my account in the US, lived there for 6 years.
Before the commission went down to $3.50 from $13.50,yes, I would look at getting more premium.
You are right, $13.50 makes a big difference in choosing trades, can be quite prohibitive, especially when selling 50 plus for .02. I used to sell a lot less for a lot more.
I feel your pain.

Reply With Quote
     

Old October 10th, 2013, 10:15 AM   #2199 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary


josh View Post
That's my question with these far OTM options--how many CLZ373P have even traded in the last couple of weeks?

It traded 15 times on 10/9 and once on 9/19. No trades in between.

70 has traded 1400 times in the same time frame.

This is a very good example of why I usually only trade the $5 increments in CL. ie 70, 75, 80.

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

Old October 10th, 2013, 11:29 AM   #2200 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,903 received
Forum Reputation: Legendary



Bakes View Post
BlueRoo/Turch,

A penny for your thoughts. I have followed Ron's methods fairly closely over the last year for very good results. I guess my main deviation from Ron's trading is where i find it worthwhile to make a trade. From memory Ron is more than willing to sell CL @ 0.02-3, whereas for me, because of our higher commission charges here in Aust i do not see that as worthwhile. I generally look to sell most options at around 0.05-6. Do you guys generally look at slightly higher Premium per option than the guys in the US because of our higher commission charges?

Regards,

Bakes

I have moved from selling low priced options and riding to expiration to selling a little further out in time and a little higher premium and then buying them back when the price erosion slows down. Especially ES.

This video explains it.
Market Measures: Theta Driven Exits - YouTube

Note the tastytrade videos on Youtube are interesting. Some of them are selling options. Be careful because you can spend days watching the videos and not get anything done.
tastytrade - YouTube

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 08:15 AM.

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 2016-12-04 in 0.16 seconds with 20 queries on phoenix via your IP 54.158.84.38