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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:570,062 / 5,734
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Selling Options on Futures?

Old October 28th, 2012, 08:20 AM   #291 (permalink)
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rosho01 View Post
The technicals on shorting coffee or selling calls look good, was tempted a whle back but it spike to 180, which was a bit out my comfort zone.

Rosho,

Actually he is making the case for selling puts in the next few quarters, on the basis of rising global demand and current depressed prices coupled with unlikelyhood of rising supply due to increasing production costs, weather problems and low prices.

Brit

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Old October 28th, 2012, 08:58 PM   #292 (permalink)
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britkid99 View Post
Rosho,

Actually he is making the case for selling puts in the next few quarters, on the basis of rising global demand and current depressed prices coupled with unlikelyhood of rising supply due to increasing production costs, weather problems and low prices.

Brit

my mistake, misread your post.

gonna start looking at cost of straddles/strangles much more when they approach big technical levels. if silver/gold gets back down to the ~26/1550 levels and consolidates for a while wld expect to see the price of a straddle bump up significantly due to high demand.

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Old November 9th, 2012, 01:23 PM   #293 (permalink)
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Coffee


I have been watching Coffee KC looking for signs that the downtrend is coming to an end.
If you look at my chart you can see at

1 There is a push lower on cummulative volume but price makes a higher low. This is indicative of limit orders absorbing the selling ie lot of effort (to go down) but little result. This is hidden divergence.

2 This time there is push to a lower low for price but buyers are holding on creating a bullish divergence

3 Buyers are entering in greater numbers, a combination of fresh new buyers and short covering from sellers from the 159 level.

This looks like the start of some long accumulation taking place,
Could we go lower? Of course if there is another push down and the recent buyers at 3 have to sell to cover that would drive down prices another leg.

I will be watching for price to take out the 158 level

Brit

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Old November 10th, 2012, 08:19 PM   #294 (permalink)
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I am watching coffee too. Settled at 155 Friday , I am thinking of selling Mar 185 call if there is a bit of a bounce next week. Record crop coming up, increase in demand but increase in volume could be more sellers coming to the table.

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Old November 11th, 2012, 11:29 AM   #295 (permalink)
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Caffee March calls

Futures Edge on FIO

Are you a NinjaTrader user?

 
I also believe, contrary to James Cordier recommendation to sell puts, coffee will stay low in the following months. I sold coffee march 200 calls at 0.72.

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Old November 11th, 2012, 03:06 PM   #296 (permalink)
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t jay View Post
I am watching coffee too. Settled at 155 Friday , I am thinking of selling Mar 185 call if there is a bit of a bounce next week. Record crop coming up, increase in demand but increase in volume could be more sellers coming to the table.

Welcome t jay,

Of course there is always the possibility that price goes nowhere much by March 2013 and it might be profitable to sell calls and puts for a deep OTM strangle.

@alferdoe

It will be interesting to see if his (James Cordier) obsevations are proved worthwhile or not. Do you receive his email correspondence?

@ron99
What are your thoughts on Coffee, Ron

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Old November 11th, 2012, 08:13 PM   #297 (permalink)
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I will chime in. I had 10 KC Puts expire this past Friday. They were 1300 and 1350 Puts. I think KC puts are still a pretty safe bet. The only thing I did not like was the margin required. It started off at a reasonable level when I sold them 3 months ago. The problem is the margin stayed really high. Usually as time ticks along and it looks like the puts will expire worthless, the margin required drops. Even on Friday the margin per contract was over $2,500 while the value of the put had gone to almost nothing. I could have bought them back but I had plenty of margin and didn't need to waste my money.

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Old November 12th, 2012, 08:44 AM   #298 (permalink)
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Raven View Post
I will chime in. I had 10 KC Puts expire this past Friday. They were 1300 and 1350 Puts. I think KC puts are still a pretty safe bet. The only thing I did not like was the margin required. It started off at a reasonable level when I sold them 3 months ago. The problem is the margin stayed really high. Usually as time ticks along and it looks like the puts will expire worthless, the margin required drops. Even on Friday the margin per contract was over $2,500 while the value of the put had gone to almost nothing. I could have bought them back but I had plenty of margin and didn't need to waste my money.

I too noticed the high margins on even far out strikes. Try making it a spread instead of naked as the high margin on the buying leg cancels out a lot of the selling margin without giving up too much premium. This can result in a much better ROI

For instance compare 1350 naked with a 1350/1200 spread.

Brit

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Old November 12th, 2012, 12:55 PM   #299 (permalink)
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I have the Coffee Jan 135 puts on , I only did 2 as the margin is so high!I may look at the Feb 2.00 Calls

What do you think of the latest newsletter? They recommend looking at Cotton Calls.

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Old November 12th, 2012, 11:03 PM   #300 (permalink)
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Don't get the newsletter but I must agree , Cotton calls would probably do well. Read a article and fundamentally it would be a good move , lots of cotton around and the exports , India and China, are not looking to buy as apparently they have lots in house. I just sold 31000 Dec Heating Oil calls for 0.0227. Been a good 24 hours for me.

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