Good information - thanks for the responses. I'm especially surprised to hear about the coffee options, because that's one of the most annoying markets for me in terms of very wide bid/asks and not much volume.
I might have to try some different order entry methods. Although I sometimes sell options < 5 delta, my typical option sale is at a higher delta and perhaps term than some of the trade ideas mentioned here. I tend to leg into things and sometimes I switch the platform over to display volatility, rather than price, and enter/adjust my orders that way. I suspect than in some of the less liquid markets and months, I'm pretty much trying to sell to the market maker, and I want that last 10 or 20 basis points of volatility, too, so the orders sit and sit...
Favorite Futures: Options on futeres of Oil, Gold, ES, Currency
Posts: 1 since Feb 2014
Thanks: 19 given,
Trading options on commodity futures
One friend of mine gave me the link to that huge thread at BigMike's forum.
I am from Russia and we have a community of people that sells commodity options. There are basically 3 camps of option sellers:
1) sell options in opposite of expected market move (calculated on fundamental basis - like suppply and demand ratio)
2) sell option strangles (delta-neutral) on relatively neutral markets with good depth and put/call equality - I belong to this camp, strangle use less margin and you don't need to HOPE for that wishable market move.
3) volatility arbitragers - they evaluate current and potential IV on further strikes and go in calendar ratio spreads (selling High volatility and purchasing low volatiliy with delta and gamma neutral to the market.
We run a skype conference, unfortunately in Russian, so it may be quite difficalt to catch whole thing and there are lots of flood
I have account with Vision Financial Markets (some people have it in OptionExpess), stick with QST.
Please let me know if you'd like to get closer to my trading experience, thoughts about going into this industry professionally.
My skype is de_bosh2008.
With great respect,
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For anyone still in the March Nat Gas calls, last week I pieced together this chart, comparing 2003 and 2014 (I updated it with through today).
Based on this chart, I bought back all my March calls, and actually went long calls. Scared out of my position, for sure.
Of course, there are a lot of reasons why 2003 is not exactly like 2014, but my account could not withstand even half of the trauma that occurred in 2003. So, I played it safe. I'm living to fight another day.
I have no idea what is in store for the next 4 trading days, but I'll bet they are interesting.
The big lesson I learned: if the ROI is too good to be true, there is a lot of risk in the position. Seller Beware!
This will almost certainly be the last time I trade March NG calls. If you see me doing it next year, please remind me that I said "never again!"
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