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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

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Selling Options on Futures?

Old September 18th, 2012, 12:53 AM   #231 (permalink)
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rosho01 View Post
Hi ron, is there a danger that by the time you are aware of fundamental changes ie they get reported in the news sources you use, a bigger move may have occurred and you were unable to make the decision to bail?

I suppose what I am trying to ask is how many of your early exit decisions are made through pure intuition (gained from experience) and how many by dissemination of market information/news (also obviously gained through experience)?

Thanks.

Hard to give you an exact number. I use all data that I can get related to that futures contract. DCOT futures only data for Managed Money trends. OI direction. Seasonal trends. Past performance of the futures. General economy direction. New fundamental info (this is probably the most important). All of these plus probably some others I'm not thinking of right now go into the decision. Then that is what goes into my gut decision.

I do find that my gut decision is better over the years.

Today the grains crashed. Seasonal trend is downward into the end of Sep grain reports. Traders taking profit before the report.

Also this year the Managed Money (specs) are very heavy on the long side. 94% long positions in Corn. 97% long in S. So when the longs start bailing it will be a big drop.

I knew when the US drought became as strong as it was that the futures would be extremely volatile. I had sold July grain puts and then decided that things were too volatile to do any thing else in grains the rest of the summer. That's the experience talking.

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Old September 18th, 2012, 12:58 AM   #232 (permalink)
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britkid99 View Post
I sold Jan 13 2000 Soybean Calls on friday at 18 7/8 ($943.75) and today they closed at 10 ($500). 4% limit down move in futures and my premium nearly halved after 1 day.

Brit

Enjoy the perfect trade. That doesn't happen too many times.

Normally grains are down into the end of Sep and then rebound in Oct. They might not rebound too much this Oct because US farmers will be selling grains right out of the field. But be aware of this seasonal trend.

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Old September 18th, 2012, 08:41 AM   #233 (permalink)
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syxforex View Post
nice work, what was your trade based on?

It was mainly based on seasonality as seen in MRCI's charts. As Ron has already mentioned there is seasonal low going into October, then a lift.

The main concern of mine was the plunging Dollar after Uncle Ben's announcement on Thursday. This could have affected prices to the upside and may still do.

I shall be watching prices closely and will not be hanging around too long on this one.

As I am in the UK it is still two hours to US open as I type this and futures are down around 25 cents I have just taken half off at 8 ($400) in case we get a bounce today.

Brit

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Old September 18th, 2012, 08:54 AM   #234 (permalink)
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ron99 View Post
Enjoy the perfect trade. That doesn't happen too many times.

Normally grains are down into the end of Sep and then rebound in Oct. They might not rebound too much this Oct because US farmers will be selling grains right out of the field. But be aware of this seasonal trend.

I know I was extremely fortuitous in my timing on the beans. Had also received an email from Mr Cordier suggesting farmers were being forced to liquidate livestock early due to costs of feeding. His suggestion was selling the 2300 level but I went a bit closer.

Congratulations on the thread getting over 12000 views, someone must be watching us.

Brit

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Old September 18th, 2012, 10:07 AM   #235 (permalink)
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Futures Edge on FIO

Are you a NinjaTrader user?

 
US dairymen are culling 5-10k more cows per week than they did last year. About 10-15% more.

Interesting that Cordier is sending out emails and not putting them on his website like he used to do.

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Old September 19th, 2012, 08:58 AM   #236 (permalink)
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I am still getting his "email seminar" series where he talks about things in the book and sometimes gives some suggestions for possible trades and also recently received the Aug/Sept pdf newsletter for prospective clients which talked about grains and livestock and possible live cattle trade on further weakness.

Brit.

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Old September 20th, 2012, 12:34 PM   #237 (permalink)
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britkid99 View Post
I sold Jan 13 2000 Soybean Calls on friday at 18 7/8 ($943.75) and today they closed at 10 ($500). 4% limit down move in futures and my premium nearly halved after 1 day.

Brit

Hi britkid,

Nice trade.

Do you have any bad/not so good positions on at the moment? Would be interesting to see how you manage them.

Also, you mention you can only use IB with your pension, so the holders of your pension allow you to trade options with the funds through certain brokers, as that correct? (sorry to go off topic).

Thanks.

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Old September 20th, 2012, 03:05 PM   #238 (permalink)
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ron99 View Post
Hard to give you an exact number. I use all data that I can get related to that futures contract

thanks, as expected.

Are all the commodity futures you trade cash settled? I guess its not that big an issue as they are either closed out before expiry or left to expire well OTM?

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Old September 21st, 2012, 10:13 AM   #239 (permalink)
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rosho01 View Post
Hi britkid,

Nice trade.

Do you have any bad/not so good positions on at the moment? Would be interesting to see how you manage them.

Also, you mention you can only use IB with your pension, so the holders of your pension allow you to trade options with the funds through certain brokers, as that correct? (sorry to go off topic).

Thanks.

Hi rosho01,

Take a look at the chart attached which shows my recent CL Nov 80 Put, and some of my analysis and thoughts behind it.

I have a SIPP with Stadia as the trustees. They are the only one I could find that gave me good access to US markets through IB. So you get low SIPP costs about 250/yr i think, plus low cost access to US. The only downside is the 150% margins they impose on top of their full exchange requirements. You can trade freely with Futures and Options on Futures but not allowed to short stocks and it is a cash account so no stock marginning allowed either. Stock options ie covered call etc can be requested.

Brit

Attached Thumbnails
Selling Options on Futures?-cl-80-put.jpg  

Last edited by britkid99; September 21st, 2012 at 10:21 AM.
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Old September 24th, 2012, 12:39 AM   #240 (permalink)
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Hi guys,
I am new to selling options ,particularly options on futures.Can we do credit spread with 1 or 2 month out and still be able to collect decent credit instead of selling naked options? Coz the idea of unlimited loss should the position goes again you is pretty scary to me.

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