Selling Options on Futures? (Page 255) - 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:568,134 / 5,727
Last Reply:December 2nd, 2016 (12:40 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 December 12th, 2013, 01:36 AM   #2541 (permalink)
Trading Apprentice
Singapore
 
Futures Experience: Intermediate
Platform: Rtrader,Zaner 360
Broker/Data: Deep Discount Trading/Rithmic,DeCarley/Gain
Favorite Futures: Future Options
 
Posts: 35 since Sep 2012
Thanks: 46 given, 49 received

NG April vs today - what I learnt.

Hi All,

As some of you have mentioned today's NG market feels a lot like Aprils, which ended very painfully for me when I sold low priced safe looking calls when things were quiet, eventually rolling the position up a number of times until I had a very unbalanced position in my accounts vs the rest of my positions. Eventually getting to the point of having that feeling that if this goes up any more it could get very ugly fast, reaching my pain threshold I decided to cover everything, and as you can guess that was right near the top of the market for by far my biggest lose of the year.

The experience made me sit back and think a lot about what had happened and what I needed to do in the future.

Some of the things that stood out were that I had absolutely no problem rolling up to greater and greater numbers of higher calls but I was absolutely shit scared to switch sides, go with the trend and sell some puts, I remember thinking if I had just switched to the other side of the market early on it would have been a different story all together. I also rolled in the same month at increments of 20-30c , that really never got me out of trouble, it just prolonged the pain.

The other thing was I was blinkered into thinking I had to roll the loss up in the NG market only. I think a lot of people have that same issue, sticking to the market they have the loss in to try make good.

Anyway roll forward to today I was sitting with short Feb 4.6C and 4.9 C's from mid Nov, NG takes off and 6th Dec I need to roll some positions, but instead of rolling up I bit the bullet and rolled some up and a lot down into 3.5P and 3.6P, learning from my previous experience. Of course the longer a trend persists the harder it is to switch sides so early is better.

Yesterday I needed to roll some more instead of rolling up 20-30 c I rolled way out , into the next month 6C as well as taking a good chunk of the loss and selling options in a spread of other quieter markets to cover that loss, breaking that fixation of having to make it back in the same market.

So compared April, still some pain but I'm really pleased I applied some of the things I learnt, avoiding ending up with a painfully large position, smaller and portfolio better balanced, and importantly staying rational.

Just thought I'd share that as it might help some of you grappling with this current wacky market thinking what you need to do or haven't experienced how painful this NG market can be before.

Cheers

Reply With Quote
     
The following 11 users say Thank You to Harvard16 for this post:
     

Old December 12th, 2013, 07:52 AM   #2542 (permalink)
Elite Member
Prague, Czech Republic
 
Futures Experience: Advanced
Platform: AgenaTrader, Track'nTrade
Broker/Data: DeCarley/OEC, IBKR, IQFeed
Favorite Futures: futures, options
 
Posts: 180 since Sep 2010
Thanks: 66 given, 83 received

Looks like another move up today!
I am long March futures from 3.572 since Nov 6, which obviously plays well. I am also short the curve and there has been some pain lately.
I am short Mar14 6 and 7 calls and will roll some puts higher up a little.

Will get interesting as soon as it hits (IF) April 29 / May 1 highs at 4.669 (March contract that is). Continuous is already getting there and I wouldn't be surprised it does so today. In such a case we can easily see 5.000 print, especially if we break and stay above the 4.470 strong resistance area in the front month…


Last edited by rani; December 12th, 2013 at 08:53 AM.
Reply With Quote
     

Old December 12th, 2013, 07:58 AM   #2543 (permalink)
Elite Member
Brisbane/Australia
 
Futures Experience: Beginner
Platform: Jtrader.
Favorite Futures: Futures
 
Posts: 22 since Feb 2013
Thanks: 6 given, 7 received



rani View Post
Looks like another move up today!
I am long March futures from 3.578, which obviously plays well. I am also short the curve and there has been some pain lately.
I am short Mar14 6 and 7 calls and will roll some puts higher up a little.

Will get interesting as soon as it hits (IF) April 29 / May 1 highs at 4.770 (March contract that is). Continuous is already getting there and I wouldn't be surprised it does so today. In such a case we can easily see 5.000 print…

the Feb underlying today has behaved differently during the US night than it has previously during the week. earlier in the week it edged lower each day, it edged up today.

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

Old December 12th, 2013, 08:05 AM   #2544 (permalink)
Elite Member
Prague, Czech Republic
 
Futures Experience: Advanced
Platform: AgenaTrader, Track'nTrade
Broker/Data: DeCarley/OEC, IBKR, IQFeed
Favorite Futures: futures, options
 
Posts: 180 since Sep 2010
Thanks: 66 given, 83 received


Bakes View Post
the Feb underlying today has behaved differently during the US night than it has previously during the week. earlier in the week it edged lower each day, it edged up today.

I think true only for Dec 11. It edged UP pre-market during the previous days.
Important signal for me is how the spreads will behave…


Last edited by rani; December 12th, 2013 at 08:11 AM.
Reply With Quote
     

Old December 12th, 2013, 08:24 AM   #2545 (permalink)
Elite Member
Prague, Czech Republic
 
Futures Experience: Advanced
Platform: AgenaTrader, Track'nTrade
Broker/Data: DeCarley/OEC, IBKR, IQFeed
Favorite Futures: futures, options
 
Posts: 180 since Sep 2010
Thanks: 66 given, 83 received

Futures Edge on FIO

Are you a NinjaTrader user?

 

ron99 View Post
SMCJB, thanks for the info.

SMCJB, at what NG price do electric companies start switching to coal? How quickly can they switch?

Not directed to me, but I believe it is around 4.750.

Reply With Quote
     

Old December 12th, 2013, 09:24 AM   #2546 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,580 since Dec 2013
Thanks: 1,392 given, 2,352 received
Forum Reputation: Legendary


SMCJB View Post
Tomorrow we expect the EIA to announce stocks dropped 90 BCF in the last week...

Seems like the consensus for today's EIA release is actually a 84/85 BCF drop in stocks (and not 90 as I previously said) versus just 8 BCF last year, and a five year average of 76 BCF.

Prices rallied 4-5c over night and then another 4c in early morning trading (~645am Central).

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

Old December 12th, 2013, 10:18 AM   #2547 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,902 received
Forum Reputation: Legendary


rani View Post
Not directed to me, but I believe it is around 4.750.

It is far lower than that.


Quoting 
As natural-gas prices have crept up closer to $4 per million BTUs, coal recovered some of its market share, rising to about 39% so far this year, according to the federal Energy Information Administration. Coal has gained ground in the middle of the country, rising to nearly 45% this year from 42% in 2012, according to PJM Interconnection, which operates the electricity market in 13 states and the District of Columbia.

In Appalachia, Coal Struggles to Compete With Natural Gas - WSJ.com


Quoting 
Raymond James believes that an average natural gas price of $3.75 in 2013 will be needed to reverse over 2 Bcf/d of the 4.2 Bcf/day that switched to gas in 2012.

Gas-to-Coal Switching Will Be Key to 2013 NG Prices | Energy Metro
So RJ is saying that at 3.75 electric companies will switch from NG back to coal.

Reply With Quote
     
The following user says Thank You to ron99 for this post:
     

Old December 12th, 2013, 10:18 AM   #2548 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,902 received
Forum Reputation: Legendary

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Electrical generation is seasonal so maybe the chart below is better.


Last edited by ron99; December 12th, 2013 at 10:28 AM.
Reply With Quote
     

Old December 12th, 2013, 10:26 AM   #2549 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,902 received
Forum Reputation: Legendary

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


NG consumption by electric companies was above coal during the low NG prices of 2012. But coal surpassed NG starting fall of 2012 and has been above NG all of this year. So it looks like above 3.50 is a point were switching from NG back to coal happens.

What I need to do is have a third line on this chart with NG prices. Any ideas how to do that in Excel?


Last edited by ron99; December 12th, 2013 at 10:32 AM.
Reply With Quote
     

Old December 12th, 2013, 10:40 AM   #2550 (permalink)
Elite Member
Prague, Czech Republic
 
Futures Experience: Advanced
Platform: AgenaTrader, Track'nTrade
Broker/Data: DeCarley/OEC, IBKR, IQFeed
Favorite Futures: futures, options
 
Posts: 180 since Sep 2010
Thanks: 66 given, 83 received



ron99 View Post
It is far lower than that.

In Appalachia, Coal Struggles to Compete With Natural Gas - WSJ.com

Gas-to-Coal Switching Will Be Key to 2013 NG Prices | Energy Metro
So RJ is saying that at 3.75 electric companies will switch from NG back to coal.

More recent: cheap coal slows switch to natural gas - Chicago Tribune
and
http://moneymorning.com/2013/06/05/natural-gas-prices-move-as-the-switchover-from-coal-continues/#.UqnLC6VqNG8

Quote: On the flip side, CAPP coal would become more competitive once again if gas prices were to rise to $4.75 per mmBtu.

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

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 04:13 AM.

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 2016-12-04 in 0.15 seconds with 20 queries on phoenix via your IP 54.211.82.105