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


Selling Options on Futures?
Started: by ron99 Views / Replies:597,069 / 5,834
Last Reply: Attachments:654

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
 654  
 
Thread Tools Search this Thread
 

Selling Options on Futures?

  #2831 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,231 since Jul 2012
Thanks: 1,030 given, 4,056 received


datahogg View Post
Ron's strategy for exiting a position is: IM=(Initial Margin), MM=Maintenance margin.
(MM + loss for positon) -----> approach 3 * IM.

But what if you plan on making adjustments to the position instead of exiting? (Maybe buy back puts and sell other puts
further out of the money.) Would the strategy be the same as Ron's strategy for exiting a position?

What are some of the strategies used for making adjustments to a position??

Thanks in advance.

If I have sold puts, and now I am getting close to loss exit point, in the past I have:

1. Sold some calls.

2. Exit existing puts, and sold lower strike puts, same contract month.

3. Exit existing puts, and sold puts, different contract month.

4. Done nothing - ignored the exit signal.


There are pros and cons to each. I have usually regretted whatever decision I made to "fix" the problem. Sometimes, I make the original problem worse.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
The following 2 users say Thank You to kevinkdog for this post:
 
  #2832 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 258 since Oct 2012
Thanks: 126 given, 75 received


kevinkdog View Post
If I have sold puts, and now I am getting close to loss exit point, in the past I have:

1. Sold some calls.

2. Exit existing puts, and sold lower strike puts, same contract month.

3. Exit existing puts, and sold puts, different contract month.

4. Done nothing - ignored the exit signal.


There are pros and cons to each. I have usually regretted whatever decision I made to "fix" the problem. Sometimes, I make the original problem worse.

Does this mean that your decision point for making adjustments is the same as your exit point??
thanks again.

Reply With Quote
 
  #2833 (permalink)
Elite Member
Steubenville Ohio
 
Futures Experience: Intermediate
Platform: OX, OEC, RJO
Favorite Futures: Options on Futures
 
Posts: 187 since Sep 2012
Thanks: 25 given, 212 received



datahogg View Post
What are some of the strategies used for making adjustments to a position??

Sometimes if I feel the need to exit, but want to stay in the same market I will roll into strangles, either in the same month or rolling out to a further contract to get more time premium and distance. If the price movement was a spike and things calm down it works fine and the problem is fixed. On the other hand, if it continues to move against you or reverses hard enough you may have to readjust again and it ends up you just prolonged your pain. I don't normally look to do this if I feel the trend that was moving against me is strong and will likely continue.

Reply With Quote
The following user says Thank You to Dudetooth for this post:
 
  #2834 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,231 since Jul 2012
Thanks: 1,030 given, 4,056 received


datahogg View Post
Does this mean that your decision point for making adjustments is the same as your exit point??
thanks again.

Not necessarily. Sometimes, if I see trouble ahead, but I'm not at the exit point, I'll just roll into a lower strike put. This will probably mean selling more options, to end up the same end profit overall, but it provides me with some breathing room.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
The following user says Thank You to kevinkdog for this post:
 
  #2835 (permalink)
Trading Apprentice
Buenos Aires Argentina
 
Futures Experience: Beginner
Platform: Sierra Chart
Favorite Futures: ES
 
Posts: 1 since Jan 2014
Thanks: 0 given, 0 received

Futures Edge on FIO

Which time slot for our live webinar events works best for you?

 

ron99 View Post
I have been selling options on futures for years. But it is rare to find others doing it. I was wondering if there are others here doing it.

I have been doing it for 5 years. Learned it from James Cordier's book.

I have sold energy, grain, softs and metal options. Far out of the money. Usually less than 90 days from expiration.

Stranggles? Congratulations. I hope one day I can practice well that strategy. I shall read that book. Can you tell me what´s your anual profit average (% of guaranties commitment)?. Thanks .

Reply With Quote
 
  #2836 (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

ES Short Inventory Build Up

From the chart attached you can see the big jump to the record high on the last day of the year, I attribute this to last minute window dressing by funds adjusting to make sure they own the years best performers.

Since then though prices have drifted sideways but the Cumulative delta has been steadily declining by some 40000 contracts. This is typical at tops and shows distribution. Heavy selling on the way down then prices float back up due to light buying/no selling, then get pushed back down on more heavy selling.

I do feel a correction coming.

Brit

Attached Thumbnails
Selling Options on Futures?-es-080114.jpg  
Reply With Quote
The following user says Thank You to britkid99 for this post:
 
  #2837 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,417 since Jul 2011
Thanks: 663 given, 4,115 received
Forum Reputation: Legendary


datahogg View Post
Ron's strategy for exiting a position is: IM=(Initial Margin), MM=Maintenance margin.
(MM + loss for positon) -----> approach 3 * IM.

But what if you plan on making adjustments to the position instead of exiting? (Maybe buy back puts and sell other puts
further out of the money.) Would the strategy be the same as Ron's strategy for exiting a position?

What are some of the strategies used for making adjustments to a position??

Thanks in advance.

I never have used MM.

Reply With Quote
The following user says Thank You to ron99 for this post:
 
  #2838 (permalink)
Elite Member
Bay Area California
 
Futures Experience: None
Platform: TT T4
Favorite Futures: Futures
 
Posts: 710 since Nov 2011
Thanks: 630 given, 730 received


kevinkdog View Post
At least your pipes did not burst!

@spj77 - next best thing after bubbles: throwing a pot of boiling water into the air. -2 F, probably -20F with wind chill.

Sorry I could not figure out how to embed this.

There have been like 40 + accidents from this over the last few days.

"If I agreed with you, we'd both be wrong."
Reply With Quote
 
  #2839 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,417 since Jul 2011
Thanks: 663 given, 4,115 received
Forum Reputation: Legendary


value tracker View Post
Stranggles? Congratulations. I hope one day I can practice well that strategy. I shall read that book. Can you tell me what´s your anual profit average (% of guaranties commitment)?. Thanks .

I can't because I do many different types of trading in one account. No easy way to get ROI% for each way of trading.

Reply With Quote
 
  #2840 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,231 since Jul 2012
Thanks: 1,030 given, 4,056 received



addchild View Post
There have been like 40 + accidents from this over the last few days.

??? From hot water burning the thrower? I actually had some big water drops hit me, but they were already frozen by the time they hit me.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread

Last edited by kevinkdog; January 8th, 2014 at 07:33 PM.
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)
 

Al Brooks: When A Good Trade Goes Bad (Risk and Probabilities)

Elite only

Ran Aroussi: Quant Trading with Python

Elite only

NinjaTrader 8: Tips and Tricks (part 2)

Mar 2

An Afternoon With FIO member @michaelemoore

Elite only

Jigsaw Trading: Keys to successfully trading the open

Mar 9

Macro view: Trump Market Risk w/Piers Curran @ Amplify Trading

Elite only

Reading the Psychology of the Market w/Brett Steenbarger & Trading Technologies

Elite only

Hybrid Machine Learning (R and TradeStation) w/Murray Ruggiero

Elite only

Spring Grains Outlook w/Sean Lusk @ Walsh Trading

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 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 09:04 AM.

no new posts
Page generated 2017-02-22 in 0.14 seconds with 20 queries on phoenix via your IP 54.146.176.30