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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:570,153 / 5,734
Last Reply:December 9th, 2016 (01:01 AM) Attachments:642

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Selling Options on Futures?

Old October 18th, 2013, 03:10 PM   #2241 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,330 since Jul 2011
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ron99 View Post
I have sold some Jan NG 5.50 calls today. Very good ROI. Bearish seasonals. Neutral fundamentals.

I so want to sell the Jan NG 3.00 puts too because if you already have on the 5.50 calls then the margin doesn't increase at all to put on the puts.

But when I see that the last 2 years Jan NG futures were the same price as it is now and how they dropped 70 & 90 cents before expiration, I am going to have to pass on the 3.00 puts.

Looking at last year, the 3.00 put was at 0.009 on Oct 18th. It was still at 0.006 on Dec 13th. Not much profit over almost 2 months. And I suspect that margin increased in the time between those dates.


Last edited by ron99; October 19th, 2013 at 10:24 AM.
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Old October 19th, 2013, 10:19 AM   #2242 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
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Favorite Futures: ES, NQ, CL, /6E futures options.
 
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Position Exit


ron99 View Post
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.

Thanks for the response.

If you sell a futures option with a delta of 0.04 , and the position goes against you. The option delta will increase.
Is there a numerical value for the option delta that you use as a value to consider exiting the position.

Thanks in advance. HH.

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Old October 19th, 2013, 10:27 AM   #2243 (permalink)
Market Wizard
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Favorite Futures: Options on Futures
 
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datahogg View Post
Thanks for the response.

If you sell a futures option with a delta of 0.04 , and the position goes against you. The option delta will increase.
Is there a numerical value for the option delta that you use as a value to consider exiting the position.

Thanks in advance. HH.

I almost never sell an option with a delta that high.

I haven't looked at delta to determine exit. I doubt that would be a good tool to use for that.

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Old October 19th, 2013, 03:16 PM   #2244 (permalink)
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Futures Options

Ron99: Been trading options on stocks for a long time. Difficult finding someone who trades options on futures. I assume the leverage is considerably greater than stock options? Any platform you know of that sim trades them?

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Old October 19th, 2013, 03:42 PM   #2245 (permalink)
Market Wizard
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Futures Edge on FIO

TeachMeOptions View Post
Ron99: Been trading options on stocks for a long time. Difficult finding someone who trades options on futures. I assume the leverage is considerably greater than stock options? Any platform you know of that sim trades them?

Yes leverage is much greater. Tax treatment is better I believe.

I don't know of any place that sim trades options on futures. I know OX doesn't.

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Old October 19th, 2013, 04:47 PM   #2246 (permalink)
Elite Member
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TeachMeOptions View Post
Ron99: Been trading options on stocks for a long time. Difficult finding someone who trades options on futures. I assume the leverage is considerably greater than stock options? Any platform you know of that sim trades them?

Thinkorswim (TOS, from TDAmeritrade) provides sim function that allows you trade everything such as stock, option and future. Though the list of future products with options is short, it does include most common ones.

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Old October 19th, 2013, 05:29 PM   #2247 (permalink)
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ron99 View Post
I am trying to do the Load command but having no luck. Can someone walk me thru it?

call it from the command line or batch file by issuing the following command: spanit fileName ???

Script???


I've been able to get this to work to create a performance bond risk summary of the portfolio ... not sure yet how to get anything like the Scan Risk Contributions in the Reports tab ... looks like that will need a different kind of script to run the spanReport utility.

Here's what I did:

- In the C:\Span4 folder (default location for installation of program) I placed a copy of the following:
-- Unzipped risk array files (cme.20131018.s.pa2 & nyb.20131018.s.pa2)
-- My portfolio file that I generated in PC-SPAN by right-clicking on my portfolio and selecting Copy Positions To File to generate a .pos file (RJO 131018.pos)

- Then I opened Notepad to create my script and typed in the following lines:
Load C:\Span4\cme.20131018.s.pa2
Load C:\Span4\nyb.20131018.s.pa2
Load C:\Span4\RJO 131018.pos
Calc
SaveCalcSummary C:\Span4\Summary.csv

-- I saved it as a text file named SpanScript.txt in the C:\Span4 folder

- Then in Notepad, on a clean slate I typed in:
spanit C:\Span4\SpanScript.txt
-- Saved this as a batch file (File->Save As changing the Save as type to All Files) named SPAN-Batch.bat in the same folder where the spanit.exe file is (should be C:\Span4\Bin)

Just double-click my batch file (SPAN-Batch.bat), and it will load the risk arrays and portfolio, calculate and create a csv file named Summary in the C:\Span4 folder with my performance bond summary.

Hopes this helps.


****UPDATE****
Make the following changes to the instructions above to see the Position and PB Requirement Reports:

- In the SpanScript.txt type the following lines:
Load C:\Span4\cme.20131018.s.pa2
Load C:\Span4\nyb.20131018.s.pa2
Load C:\Span4\RJO 131018.pos
Calc
Save C:\Span4\Risk.xml


- In the SPAN-Batch.bat file type the following lines:
C:\Span4\Bin\spanit.exe C:\Span4\SpanScript.txt
C:\Span4\RptModule\spanReport.hta C:\Span4\Risk.xml


This will create the reports in the C:\Span4\Reports folder.


Last edited by Dudetooth; October 19th, 2013 at 06:07 PM. Reason: Updated info
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Old October 19th, 2013, 06:20 PM   #2248 (permalink)
Market Wizard
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Thank you Dudetooth! I will give it a try.

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Old October 20th, 2013, 09:25 AM   #2249 (permalink)
World'sWorstTrader
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Favorite Futures: ES, NQ, CL, /6E futures options.
 
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TOS Futures


walker View Post
Thinkorswim (TOS, from TDAmeritrade) provides sim function that allows you trade everything such as stock, option and future. Though the list of future products with options is short, it does include most common ones.

/ES
/NQ
/ZB (30 yr bond)
/ZF (5 yr note)
/ZN (10 yr note)
/ZT (2 yr note)
/CL Crude
/ZC Corn
/ZS Soy Beans
/ZW wheat

I believe TOS offers these Futures options.
Please correct me if I am wrong.

HH.

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Old October 20th, 2013, 05:27 PM   #2250 (permalink)
Trading Apprentice
Phoenix, AZ/USA
 
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ron99 View Post
I almost never sell an option with a delta that high.

I haven't looked at delta to determine exit. I doubt that would be a good tool to use for that.

I'm new to this forum and I apologize if this has already been covered.

Ron99, do you have an exit point that you always use, such as the premium doubles from what you collected, etc.?

Thanks.

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