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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,616 / 5,727
Last Reply:December 2nd, 2016 (12:40 PM) Attachments:642

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Selling Options on Futures?

Old December 8th, 2013, 10:26 PM   #2501 (permalink)
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muffin58 View Post
ron:
how far out ( month) are you going at present on the CL options to sell the 25 otm puts and 30 otm calls?

NG up again tonite. Thought it may turn down based on the extended temps. Not yet.
Moved my NGH 530 calls out to NGH 600. this is what I meant when I said I was risk averse.
My CL options are feb 80, 81 ,83 puts and mar 75 puts, 110, 115 calls. Had 105 calls also but dec 3 move scared me out.
Muffin58

Around 90 DTE.

83 puts??? Way too risky for me.

Prices in evening have very little correlation with prices the next mid morning. Especially Sunday night.

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Old December 8th, 2013, 10:44 PM   #2502 (permalink)
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The bullet points for the webinar are:

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Old December 8th, 2013, 10:47 PM   #2503 (permalink)
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Ron

so you're getting about $40-$50 on the calls and about $100 on the puts?

the 83 puts show a delta of .02 and only have 38 days to go. I plan on buying them back end of dec and put the margin into something further out.
Are you buying back your options yet or letting them expire?

Muffin58

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Old December 8th, 2013, 11:11 PM   #2504 (permalink)
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muffin58 View Post
Ron

so you're getting about $40-$50 on the calls and about $100 on the puts?

the 83 puts show a delta of .02 and only have 38 days to go. I plan on buying them back end of dec and put the margin into something further out.
Are you buying back your options yet or letting them expire?

Muffin58

Depends on ROI and other options available. If I can roll into better trade with higher ROI I do that. Otherwise keep them.

A $10 move in CL will wipe you out if you have 83 puts.

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Old December 9th, 2013, 03:17 AM   #2505 (permalink)
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kevinkdog View Post
Using Interactive Brokers is a big problem. Their margin requirement is too high. SPAN minimum (which is what Options Express requires for ES, at least for US people) is $1236 per contract, or $6180 total. That has a huge impact on your return.

Hey Kevindog - thanks for this. I didn't realise that IB didn't use the SPAN minimum calculation and that they applied their own margin rules. Your right, it certainly does eat into my return so I'll be looking around for other brokers that are more aligned to my trading plan...

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Old December 9th, 2013, 03:23 AM   #2506 (permalink)
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datahogg View Post
This is just my opinion, but the volatility of ES presently is very low. A delta of 0.0568 seems a little high for the low
IV. I am waiting for the IV of the ES options to increase, but I do have some puts sold a few weeks back at
1440 (Dec), 1545 (Dec), and 1515 (Jan). As an example the IM of the 1515(Jan) put was 1432.
Good luck HH.

Hey datahogg - Thanks for the reply....Yes, the margin to profit ratio for the trade I placed doesn't seem 'ideal' for how I want to trade. Hence, my question about seeking any advice on how people identify the assets that do profit high IV with low delta to sell. I'm amazed that the 1515 (Jan) IM was so low. I assume this was for 1 contract??? Even so, it is still much lower than the amount of IM that I had to pay for each contract....

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Old December 9th, 2013, 10:21 AM   #2507 (permalink)
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IM

Yes the IM was for 1 contract. I had only 5 total. Maybe IB uses REG - T margin instead of Span Margin for
options on futures?? At any rate, good luck.

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Old December 9th, 2013, 03:20 PM   #2508 (permalink)
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My feed shows 3207 ng mar 6 calls traded so far today. open int was 217.

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Old December 9th, 2013, 05:35 PM   #2509 (permalink)
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muffin58 View Post
My feed shows 3207 ng mar 6 calls traded so far today. open int was 217.

I sold some of them.

But not thousands.

On 11/27 11,700 Feb strangles traded. 3.00 puts 5.15 calls for a combined price of .010. Today it settled at .025. Or a $1,755,000 loss so far for the seller.

Last Wed 8,600 Apr 2.90 puts sold for .010.


Last edited by ron99; December 9th, 2013 at 05:46 PM.
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Old December 9th, 2013, 06:49 PM   #2510 (permalink)
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Somebody may be looking for a job then.

Did you roll you're 5.50s into the 6.00 or are you just selling more?

I'm looking forward to your webinar Thurs. Never been to one. Always find it interesting and educational on how others see and trade the markets. There use to be some very astute traders on the TFC forum. Very smart, and always willing to help. You remind me of those people. Hard to find that now without all the bickering on any of the commodity boards. Thanks

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