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


Selling Options on Futures?
Updated: Views / Replies:657,853 / 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?

  #271 (permalink)
Trading Apprentice
Toronto/Canada
 
Futures Experience: Advanced
Platform: Sierra Charts
Favorite Futures: Options
 
Posts: 25 since Oct 2012
Thanks: 20 given, 5 received

Okay

I have sold :
2 CL Feb 65 Puts

And
2 SI Mar 24 Puts

Initial Margin is 8984

Mat is 6165

The silver trade is a bit aggressive, will have to keep a eye on it.

Reply With Quote
 
  #272 (permalink)
Trading Apprentice
jawatimur
 
Futures Experience: Intermediate
Platform: metatrader
Favorite Futures: forex, futures
 
Posts: 3 since Oct 2012
Thanks: 0 given, 0 received

Repair of Selling put when price agains us

dear ron99,

thanks for your article about futures on options thats realy help me. i have trade futures options since february 2012.. i have some problem when price agains me.. do you have any solution or repair / adjustment strategy if the price agains our position ? because usually i am only stop my position.. thanks before.. gbu

Reply With Quote
 
  #273 (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



Mark59 View Post
Okay

I have sold :
2 CL Feb 65 Puts

And
2 SI Mar 24 Puts

Initial Margin is 8984

Mat is 6165

The silver trade is a bit aggressive, will have to keep a eye on it.

Is that 8984 for just the SI options? At OX it is 6178 for those.

Doing a SI option 125 days out and at a .0600 delta is extremely risky. I would never do that.

Reply With Quote
 
  #274 (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


aayohanes View Post
dear ron99,

thanks for your article about futures on options thats realy help me. i have trade futures options since february 2012.. i have some problem when price agains me.. do you have any solution or repair / adjustment strategy if the price agains our position ? because usually i am only stop my position.. thanks before.. gbu

If it looks like the price will not recover then you just need to get out.

How risky are the positions you are putting on? What are some examples of your trades?

Reply With Quote
 
  #275 (permalink)
Trading Apprentice
Toronto/Canada
 
Futures Experience: Advanced
Platform: Sierra Charts
Favorite Futures: Options
 
Posts: 25 since Oct 2012
Thanks: 20 given, 5 received

Ron

That is for both positions , Silver trade was def to aggressive.

Reply With Quote
 
  #276 (permalink)
Trading Apprentice
jawatimur
 
Futures Experience: Intermediate
Platform: metatrader
Favorite Futures: forex, futures
 
Posts: 3 since Oct 2012
Thanks: 0 given, 0 received

Repair of Selling put when price agains us

Dear ron99,

this is my example trade on oct 12, 2012
sold CL DEC 75.5 PUT @0.14
margin 2500
price CL when i opened that trade is 91.7
yesterday when CL price is 85.90 the premium became 0.35
what should i do ?
gbu

Reply With Quote
 
  #277 (permalink)
Elite Member
Milton Keynes UK
 
Futures Experience: Intermediate
Platform: Investor/RT, Sierra Chart
Favorite Futures: Futures Options, CL
 
Posts: 156 since Jun 2009
Thanks: 74 given, 115 received


aayohanes View Post
Dear ron99,

this is my example trade on oct 12, 2012
sold CL DEC 75.5 PUT @0.14
margin 2500
price CL when i opened that trade is 91.7
yesterday when CL price is 85.90 the premium became 0.35
what should i do ?
gbu

This is purely my obsevations on this. Price has bounced off the lows and option is now worth around 0.20
You need to ask if you think CL will drop another 10$ in less than 3 weeks. If price consolidates or rises slightly the option will quickly decline further.

I am not a fan of odd half dollar strikes such as yours. This is entirely due to liquidity, look at the open interest.

85 - 32955
80 - 48003
75.5 - 177
75 - 32059

This lack of liquidity will give you a worse fill if you have to exit in a hurry.

To answer your question on repair strategy, the ultimate defense if price makes another drop is to short the futures. If you only have a few contracts on, one futures contract would cover losses easily. Keep it on until you have made up any losses and close it out if price comes back to your entry point.

Looking at the open interest makes me think there may be a shake out push down to 85.
If it does, that would be an attractive buying area for me.
I look forward to Rons comments

Brit


Last edited by britkid99; October 24th, 2012 at 04:01 AM.
Reply With Quote
The following 2 users say Thank You to britkid99 for this post:
 
  #278 (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


aayohanes View Post
Dear ron99,

this is my example trade on oct 12, 2012
sold CL DEC 75.5 PUT @0.14
margin 2500
price CL when i opened that trade is 91.7
yesterday when CL price is 85.90 the premium became 0.35
what should i do ?
gbu

Are you sure you gave us the correct info? My data provider doesn't have that option trading at 0.14 on the 12th. Was it the 22nd?

The option never traded at 0.35 yesterday. 0.31 was the high. It settled at 0.20.

0.06 loss is not anything to panic about yet. If you had/have enough excess you should be able to ride it out unless CL drops a lot more.

The 11.00 your strike is less than futures is tight but with enough excess and only 21 days to go you should be OK.

But you need to move further away in your strikes.

I agree with britkid99 that you should not trade the in between strikes. Too low volume.

For a beginner in option selling, I would not recommend selling futures to protect losses. Too easy to get run over by a price swing. Just trade out of it if it is too much pressure for you to handle.

If the margin was 2500, then you should have had 5000 excess. That should be enough excess to ride this dip out. I highly doubt CL is going under 80 in 21 days.

Reply With Quote
The following user says Thank You to ron99 for this post:
 
  #279 (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


Mark59 View Post
Ron

That is for both positions , Silver trade was def to aggressive.

When you say both is that both SI options or both (all 4 contracts) for the SI and the CL?

Reply With Quote
 
  #280 (permalink)
Trading Apprentice
Toronto/Canada
 
Futures Experience: Advanced
Platform: Sierra Charts
Favorite Futures: Options
 
Posts: 25 since Oct 2012
Thanks: 20 given, 5 received


Hi Ron

That was for all 4 Options, 2 Silver & 2 Oil.

Question;

When you budget to keep twice the Margin in reserve do you count the Maintenance Margin as well?

Thanks!
Mark

Reply With Quote
The following user says Thank You to Mark59 for this post:

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 02:25 PM.

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 2017-06-22 in 0.09 seconds with 19 queries on phoenix via your IP 54.224.38.78