Selling Options on Futures? (Page 229) - 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:569,025 / 5,728
Last Reply:22 Hours Ago (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 28th, 2013, 08:37 PM   #2281 (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

Bean Oil

Is bean oil a candidate. Bearish and possibly retesting low and having a high volatility?

Reply With Quote
     

Old October 28th, 2013, 08:44 PM   #2282 (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


BlueRoo View Post
Is bean oil a candidate. Bearish and possibly retesting low and having a high volatility?

I think you'll have trouble finding a decent ROI. Bean Meal has a much higher ROI.

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 28th, 2013, 11:40 PM   #2283 (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



kevinkdog View Post
I think you'll have trouble finding a decent ROI. Bean Meal has a much higher ROI.

Yes I have worked up a few strangles and it is not good. Oh well, one has to explore these things. Thanks Kevin, I am slowly starting to diversify my activities. There is a bit to learn when looking further a field or rather exploring the numbers and assessing alternative trades. I have found the ROI a good method for this comparison matched with probability. BEAN OIL IS OUT!

Reply With Quote
     

Old October 28th, 2013, 11:46 PM   #2284 (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


Raven View Post
Good diversity! I am in all of those too except for US. I do trade some TY instead. Pretty much the same except that it seems like TY has more volume.
r

TY is Ten Year Bonds right? Isn't the code ZN? Help!

Reply With Quote
     

Old October 29th, 2013, 12:15 AM   #2285 (permalink)
Trading for Fun
Huntsville AL/USA
 
Futures Experience: Intermediate
Platform: optionsXpress
Favorite Futures: Options on Futures
 
Posts: 54 since May 2012
Thanks: 80 given, 26 received

Futures Edge on FIO

BlueRoo View Post
TY is Ten Year Bonds right? Isn't the code ZN? Help!

Yes, that is the 10 year. It is TY for optionsXpress. I think ZN for others. I don't know why they differ.

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

Old October 29th, 2013, 03:28 PM   #2286 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 257 since Oct 2012
Thanks: 126 given, 75 received

Crude

+ CLG4 72P @ 0.08 Delta= 0.0134
- CLG4 75P @ 0.12 Delta= 0.0225

Vertical @ 0.04 , DTE = 79 IM=303.00

I sold some of these. Good position or bad?

Reply With Quote
     

Old October 29th, 2013, 03:44 PM   #2287 (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


datahogg View Post
+ CLG4 72P @ 0.08 Delta= 0.0134
- CLG4 75P @ 0.12 Delta= 0.0225

Vertical @ 0.04 , DTE = 79 IM=303.00

I sold some of these. Good position or bad?


I calculate a 1.3% monthly ROI on that, assuming you still keep the 3X margin excess. If you decide to keep less excess because of the 72P purchase, you will have a better return.


I hope it works out for you!

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 30th, 2013, 09:43 AM   #2288 (permalink)
Trading Apprentice
Washington, DC
 
Futures Experience: Advanced
Platform: TradeStation, OX, Etrade
Favorite Futures: options
 
Posts: 1 since Oct 2013
Thanks: 4 given, 1 received

spread margins on OX

I have finally finished reading the full thread. Thank you to everyone who selflessly shared their systems and ideas and especially to Ron for initiating the thread and offering his constant advice. My name is Frank. I used to be a professional trader on OTC energy and environmental markets (Carbon, Electricity, Gas) for utilities.
I have been trading options on the side for 14 years and I can say that the only strategy that has given me consistent results over the years was selling premium. There is very little literature on the topic that goes beyond theory, so when I found this thread I was surprised and amazed that I am not alone as an individual options seller vs professional trading houses. I have learned a lot from you and I intend to keep learning. Like many of you I started off trading stocks and stock options then I moved to index options. I also traded futures for a while but I only started doing futures options recently. Which kind of closes the full circle.

I have a question regarding OX spreads margins. I know from this thread that the Trade Calc does not properly work, so I addressed the issue through customer service at OX. After a long discussion with several reps they brought in one of the futures brokers. She indicated that Trade Calc computes margin properly for spread options on futures using SPAN. I showed them how margin differs dramatically for 1 contract vs 2 contracts. Also if you keep adding contracts margin requirements decrease dramatically when you reach 100 contracts and tend to stay there. For example, an iron condor with 78 DTE on CL requires $912 IM for 1 contract ($70 premium) and $966 for 2 ($140 premium) which makes no sense. But it only requires 31% premium to margin ratio when you enter 5 contracts. The IM starts decreasing as you enter more contracts, so when you reach 100 contracts the requirement is only around 45% and it does not change much if you enter 1000 or 2000 contracts. I asked them if substracting IMs for 1 and 2 contracts could fix it (as suggested in several parts of this thread) and they had no idea what I was talking about.
They pointed out that SPAN requires less margin as the volume of contracts increases, and that the computations were accurate. I am not familiar with SPAN and I wanted to post the question in this forum in case any of you have heard of anything like this. It does not sound right to me but they kept insisting there are no issues with Trade Calc.
Thanks

Reply With Quote
     
The following 2 users say Thank You to ffasin for this post:
     

Old October 30th, 2013, 10:19 AM   #2289 (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

Welcome ffasin.

SPAN margin does not decrease per option/spread with more quantity.

Here are the emails I got from OX.

Quoting 
7/16/09
Regarding the SPAN issues I have been digging quite a bit to figure out where these figures are coming from and here is what I was able to determine after much research and confirmation with coworkers. My initial thoughts were that the SPAN files we were receiving from the various exchanges were corrupted during the process at some point but this was found not to be the case.

The actual cause was much older and goes all the way back to when we merged the old XpressTrade platform into the OptionsXpress platform. Prior to the merge OX did did not use SPAN for futures requirements and held the full amounts regardless of the makeup of the portfolio. XT did use SPAN but the coding was old and had not been updated in some time. We took that old code and configured it to work with the OX platform. It is this old code that is causing the issue.

The actual time and development resources needed to correct the code are quite large and something that has been discussed at length. However we are making a change to our SPAN system that involves framework set forth by the CME. We expect that new system to hopefully be live before the end of the year which is along the same projected time frame that the current system would be corrected in. Unfortunately there isn’t a short term fix, however there is a light at the end of the tunnel in that we are aware of the issue and are working on a completely new SPAN system that should correct the issue and bring the requirements inline with what even their modified values would display. I realize that this doesn’t help any trades in the short term and I apologize for that but I am confident that the wait for the newer system will be well worth it.

Seth James
AVP/ROP


Quoting 
4/30/10
I pinged my developers about your issue and they got back to me today. The SPAN program issues are currently at a crossroads and they have revised their time frame to a no ETA as to when the issue will be resolved. I did express my frustration over this approach and stressed that it needed to be done. I know that isn’t the answer you are wanting to hear and I’m sorry I could not give you better news. Since you have to call in and have the accounts looked at each time I spoke to my trading desk to see what could be done about the turnaround time. If you do have to call in a trade or to ask about the requirements please ask for John Grigus or Chris Benson as they will be familiar with your account and it should drastically reduce the time to get your orders placed. Both a senior futures traders and are very familiar with the products and SPAN margin. I will do what I can to stay on top of the issue but based on what they have told me I do not know when they plan on implementing this fix at this point.

Sincerely,
Seth James AVP/ROP


Quoting 
6/28/11
Apparently, this was supposed to be corrected in our buying power overhaul, which included an update of SPAN. Buying power is something that is critical to the site, and not something that they have been able to rush (two years and counting). To give you an idea of the scope, we have 11 years of code that we have been modifying as changes came along, which we’re now trying to both update and consolidate it into a unified system..

Unfortunately this has been a far bigger project than anyone thought, and while some of it has been released, it still isn’t finished, and recently, the SPAN update was put on hold. Thanks to your bringing it to my attention I was able to get Q&A to regard this as a bug fix, and they are working to get it corrected.

Due to the merger process, our release schedule is in a bit of disarray as there are some things that need to be done before that can be completed. I should have a better time-table for you in a day or two, but I have managed to get priority attached to the fix.

Philip Bennett
Executive Vice President/Signature Services

Feel free to copy these emails and send them to OX.

The quality of customer service has dropped since Schwab bought them. I had one rep insist that nobody can trade futures in an IRA account. But we all know that is not correct. It is just a OX rule.

I just emailed Seth James about this. Let's see what his response is to me.

Phillip Bennett no longer works for OX. That's too bad because he was excellent in getting problems fixed.

Reply With Quote
     
The following 5 users say Thank You to ron99 for this post:
     

Old October 30th, 2013, 09:26 PM   #2290 (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

OX MARGIN


So if the margin in the trade calculator is incorrect in OX then the margin in your account balances must also be incorrect. I don't see a difference between them.

THAT HAS TO BE ALARMING! Right? Particularly when that is what you are going on in order to maximize your capital and trade exposure.

What is the solution?

Reply With Quote
     

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 04:10 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 2016-12-07 in 0.16 seconds with 20 queries on phoenix via your IP 50.16.52.237