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Selling Options on Futures?
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Selling Options on Futures?

  #2191 (permalink)
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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?

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  #2192 (permalink)
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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
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  #2193 (permalink)
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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.

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  #2194 (permalink)
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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.

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  #2195 (permalink)
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Is the margin listed in the OX trade calculator correct?

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What value do you place on the webinars 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?

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  #2196 (permalink)
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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
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  #2197 (permalink)
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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

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  #2198 (permalink)
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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.

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  #2199 (permalink)
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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.

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  #2200 (permalink)
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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

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