Selling Options on Futures? - Options on Futures | futures io social trading
futures io futures trading


Selling Options on Futures?
Updated: Views / Replies:660,922 / 6,181
Created: by ron99 Attachments:714

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • 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.

-- Big Mike, Site Administrator

Reply
 714  
 
Thread Tools Search this Thread
 

Selling Options on Futures?

  #2651 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,895 since Dec 2013
Thanks: 1,608 given, 2,877 received
Forum Reputation: Legendary


SMCJB View Post
Since the Natural Gas conversations seem to have stopped I'm guessing you guys all got out.
For what it's worth
19-Dec EIA Release Estimates.
Based upon 37 estimates...
Average -266
Median -267
Range -228 to -283
Std Dev 11.7
Note that several of the major surveys have averages close to 260, but they have smaller data sets.
2012 EIA Report -70
6 year Average -133
I believe largest withdrawal in December was 208 and the largest withdrawal ever 274.

-285 WOW
Market trading +15c
Weekly Natural Gas Storage Report - EIA

Reply With Quote
The following user says Thank You to SMCJB for this post:
 
  #2652 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 260 since Oct 2012
Thanks: 126 given, 75 received

Delta Hedging

[QUOTE=PeterOhlson;376218
This is very crude obviously. *sigh* wish I had a database of all options on the S&P space, with IVs and all the greeks, where you could backtest by attaching automatic deltahedges to test profits of various structures through time, the structure being defined by some variables like % OTM, delta, theta/gamma and the backtest automatically opening the structure at the beginning of each new cycle. Because of my lack of Goldman Sachs like infrastructure I'm forced to use Excel and my brain along with the rest of us unwashed masses. Sucks /QUOTE]

It is easy to hedge the delta of a short far out of the money put. Say you have sold a naked put with a delta of 0.025,
then sell a call vertical with a delta close to 0.025. The call vertical reduces the risk to the downside, and has
reasonable risk to the upside. This also increases the maximum possible profit.

Reply With Quote
 
  #2653 (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



SMCJB View Post
Since the Natural Gas conversations seem to have stopped I'm guessing you guys all got out.
For what it's worth
19-Dec EIA Release Estimates.
Based upon 37 estimates...
Average -266
Median -267
Range -228 to -283
Std Dev 11.7
Note that several of the major surveys have averages close to 260, but they have smaller data sets.
2012 EIA Report -70
6 year Average -133
I believe largest withdrawal in December was 208 and the largest withdrawal ever 274.

Thanks for the info.
Bought back my Mar 6 calls for break-even. Looking to sell Mar 7 calls (for a better premium than I've sold my Mar 6).

Reply With Quote
 
  #2654 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,616 since Jul 2011
Thanks: 756 given, 4,492 received
Forum Reputation: Legendary


datahogg View Post
It is easy to hedge the delta of a short far out of the money put. Say you have sold a naked put with a delta of 0.025,
then sell a call vertical with a delta close to 0.025. The call vertical reduces the risk to the downside, and has
reasonable risk to the upside. This also increases the maximum possible profit.

That's step one. Then what do you do when futures keep moving lower? Add more calls? And what do you do when the futures reverse and you have on a bunch of calls?

Show us an example using short naked NG calls the last 4 weeks.


Last edited by ron99; December 19th, 2013 at 11:39 AM.
Reply With Quote
The following user says Thank You to ron99 for this post:
 
  #2655 (permalink)
Elite Member
Germany
 
Futures Experience: Intermediate
Platform: Ninjatrader 7
Favorite Futures: Stocks
 
Posts: 78 since Apr 2011
Thanks: 36 given, 59 received


datahogg View Post
Thanks for your methods for the market. It might be more instructive if you gave the actual options bought and sold in a list form.

In the picture you can look at the title of the window for the spesific options bought and sold. Anyone can easily check the numbers I posted...

Reply With Quote
 
  #2656 (permalink)
10 out of 10
Sacramento, CA
 
Futures Experience: None
Platform: None
Broker/Data: OX and DeCarley
Favorite Futures: Futures options
 
eudamonia's Avatar
 
Posts: 310 since Jul 2010
Thanks: 299 given, 424 received

It's interesting to see how unhinged March NG is from theoretical pricing:

Right now the March contract is up 16.6 cents.

$5.5 March calls which started the day at 0.15 delta are now 0.21 delta but are up 54 cents (suggesting that we just saw a one day 35 cent move).

$6 March calls which started the day at 0.09 delta are now 0.14 delta but are up 40 cents (suggesting that we just saw a one day 45 cent move).

$7 March calls which started the day at 0.05 delta are now 0.07 delta but are up 18 cents (suggestion that we just saw a one day 35 cent move).

Reply With Quote
The following 2 users say Thank You to eudamonia for this post:
 
  #2657 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,895 since Dec 2013
Thanks: 1,608 given, 2,877 received
Forum Reputation: Legendary

Blue Horseshoe Loves March NG Vol & Skew

Greed is Good - Gordon Gekko!

Reply With Quote
 
  #2658 (permalink)
10 out of 10
Sacramento, CA
 
Futures Experience: None
Platform: None
Broker/Data: OX and DeCarley
Favorite Futures: Futures options
 
eudamonia's Avatar
 
Posts: 310 since Jul 2010
Thanks: 299 given, 424 received


SMCJB View Post
Blue Horseshoe Loves March NG Vol & Skew

Greed is Good - Gordon Gekko!

From the charts you posted earlier it looks like this typically mean reverts. Is this mean reversion based on NG prices or overall supply or a certain time period?

Reply With Quote
 
  #2659 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,895 since Dec 2013
Thanks: 1,608 given, 2,877 received
Forum Reputation: Legendary


eudamonia View Post
From the charts you posted earlier it looks like this typically mean reverts. Is this mean reversion based on NG prices or overall supply or a certain time period?

Price, Vol & Skew all spiking on the concern that we may not have enough gas in storage for the winter. If this is true the short squeeze hits March, hence why your seeing what you are in the March Calls. This is not a rare occurrence as you can see in the charts I posted.

Post 375470

If it's not true and we don't literally run out, which is again normally the case, then the March premium will disperse and March will probably trade equal to or at a discount to April. Of course we won't know whether that's the case for a while...

Reply With Quote
The following 2 users say Thank You to SMCJB for this post:
 
  #2660 (permalink)
Elite Member
London/UK
 
Futures Experience: Intermediate
Platform: IBs ladder / Market Delta charts
Broker/Data: IB / IQfeed
Favorite Futures: Bund
 
Posts: 438 since Sep 2012
Thanks: 260 given, 96 received



rani View Post

The key price level for next week is 4.470, which is the May 2010 / April 2013 trendline. If NG breaks and holds above this level (and stays there the week after), there is not that much resistance above.

touched it briefly today, lets see if it breaks & holds above. hopefully not...though price at these levels appears to be reasonable value as per the EIA:

"The EIA also forecasts that gas prices will be higher than the year-ago level thanks to lower natural gas inventories and higher household heating demand."

Read more: Natural Gas ETFs Dip on Milder Weather Forecast - ETF News And Commentary - NASDAQ.com

Reply With Quote

Reply



futures io > > > > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

July Journal Challenge w/$1100 in prizes from TopstepTrader

July

John @ No BS Day Trading (TBA)

Elite only

An Afternoon with FIO member Softsoap (being rescheduled)

Elite only
     

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 11:00 AM
Recommend futures, options Broker? sam1197 Reviews of Brokers and Data Feeds 17 March 27th, 2013 12:42 AM
Trading Futures with options as protection Gooffy2010 Commodities Futures Trading 6 October 2nd, 2012 04:55 PM
Selling Njniatrader sam1197 NinjaTrader 22 June 28th, 2012 12:40 PM
Zen-Fire Futures options tici88 Reviews of Brokers and Data Feeds 1 July 30th, 2011 09:16 AM


All times are GMT -4. The time now is 11:53 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@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 2017-06-29 in 0.11 seconds with 19 queries on phoenix via your IP 54.162.76.55