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Selling Options on Futures?
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Selling Options on Futures?

  #2231 (permalink)
Elite Member
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CLX 125C

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  #2232 (permalink)
Market Wizard
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39.60 is as low as CL margin for options goes at OX. Never lower at current margin rate. The margin for a 170 call is the same. 39.60.

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  #2233 (permalink)
Trading for Fun
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Suggestions for directing allocation


So I have 10% of capital to apply to another trade this month to reach my 30% allocation to margin. Strangles in CL and NG in place. So starting a little diversification. Considering RB with its lift in its volatility. Any suggestions where I might look? Have also thought ES puts at 1500. Just not sure where to start. So used to the one commodity a month trade! Your ideas will be appreciated.

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  #2234 (permalink)
Market Wizard
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BlueRoo View Post
So I have 10% of capital to apply to another trade this month to reach my 30% allocation to margin. Strangles in CL and NG in place. So starting a little diversification. Considering RB with its lift in its volatility. Any suggestions where I might look? Have also thought ES puts at 1500. Just not sure where to start. So used to the one commodity a month trade! Your ideas will be appreciated.

RB is very volatile, and is usually correlated to CL. I'm in CL puts and RB puts right now, and I really look at that as one position. Some markets I am heavy in right now:

Soybean Puts

Nat Gas Calls

Nat Gas Puts

30 Year Bond Calls

Gold Puts

Cocoa Calls


By "heavy" I mean that those positions use between 10-15% of my total margin. That is normally as high as I go - that way when I am wrong, it is not a killer situation.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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  #2235 (permalink)
Trading for Fun
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Kevin, Appreciate the reply. You might remember your reply to my question on diversification from a few months ago. I absolutely agree with your approach. It is just taking me a while to get there. I have traded CL singularly for so long it has been hard to think elsewhere. That's why the work on seasonality - an attempt to understand the other options. This is helping. But it is not experience. You have given me some home work to do before tonights (AU time) session so I best get to it! Cheers Mate!

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  #2236 (permalink)
World'sWorstTrader
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200% Rule

RON99 and all others. Thank you for all information regarding this topic.

Is the 200% rule for exiting trades as discussed in Cordier's book a good working exit point?

Do most traders keep the risk approximately the same across 4 or 5 different positions?

Thanks in advance. H. Hampton.

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  #2237 (permalink)
Market Wizard
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datahogg View Post
RON99 and all others. Thank you for all information regarding this topic.

Is the 200% rule for exiting trades as discussed in Cordier's book a good working exit point?

Do most traders keep the risk approximately the same across 4 or 5 different positions?

Thanks in advance. H. Hampton.

The 200% does not work for the far OTM options we sell.

For example, if you sell an option for $50 and it doubles to $100, it is losing 100% but dollar wise it is only $50. Certainly manageable.

I vary on the risk. I like to be in several commodities but if there is something good like KC last summer, I will overload on that position.

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  #2238 (permalink)
Market Wizard
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I have sold some Jan NG 5.50 calls today. Very good ROI. Bearish seasonals. Neutral fundamentals.

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  #2239 (permalink)
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ron99 View Post
I have sold some Jan NG 5.50 calls today. Very good ROI. Bearish seasonals. Neutral fundamentals.

That makes me feel good. I was starting to wonder about my decision. I sold some Dec NG 5 and 5.1 calls in past few weeks, and am still around breakeven on them (they were in the red for a while). Not as high of an ROI as what you have, either.

I think sometimes when I see something I like, it is better to wait a little bit and see if it gets better. Dec NG was a good example, since up until a few days ago, it had been going up. I hate missing out, though too!

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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  #2240 (permalink)
Market Wizard
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kevinkdog View Post
That makes me feel good. I was starting to wonder about my decision. I sold some Dec NG 5 and 5.1 calls in past few weeks, and am still around breakeven on them (they were in the red for a while). Not as high of an ROI as what you have, either.

I think sometimes when I see something I like, it is better to wait a little bit and see if it gets better. Dec NG was a good example, since up until a few days ago, it had been going up. I hate missing out, though too!

Waiting is 50-50 whether it is a good idea or not. So I have quit waiting for a better price. Unless there is news coming out that might move prices in your favor.

This reminds me of something I read a week ago. The analyst said back in late July to buy CC futures, but wait for a pullback. A pullback never came and he missed out on a very good return.

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