Selling Options on Futures? (Page 307) - Options on Futures | futures.io
futures.io futures trading
 

Go Back   futures.io

> Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures


Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,746 / 5,728
Last Reply:23 Minutes Ago (05:26 PM) Attachments:642

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
 642  
 
Thread Tools Search this Thread

Selling Options on Futures?

Old February 13th, 2014, 09:33 PM   #3061 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,194 since Jul 2012
Thanks: 1,004 given, 3,965 received


CafeGrande View Post
^ On a related note, can you find sufficient liquidity to sell a bunch of 1-Delta (.01) options with a premium of $40? I imagine there is plenty of liquidity in ES and maybe CL if you pick common, round number strikes, but what about some of the other physical commodity markets?

I realize everyone has their own number, but let's say to cover trade research and monitoring time, commissions and provide a decent profit, a trade won't be considered unless it's $1000 in gross premium (or $2000 or $10,000 or whatever). Even with a $1000 hurdle, can you get filled on 25 options without selling at or close to the bid?


I look for deltas < .05, and > $10 premium after commissions. Right now, I have 6 positions, in different instruments, of at least 20 contracts or more.

It isn't easy to get fills sometimes, especially with quantity, but it is possible.

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:
     

Old February 13th, 2014, 10:09 PM   #3062 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,904 received


CafeGrande View Post
^ On a related note, can you find sufficient liquidity to sell a bunch of 1-Delta (.01) options with a premium of $40? I imagine there is plenty of liquidity in ES and maybe CL if you pick common, round number strikes, but what about some of the other physical commodity markets?

I realize everyone has their own number, but let's say to cover trade research and monitoring time, commissions and provide a decent profit, a trade won't be considered unless it's $1000 in gross premium (or $2000 or $10,000 or whatever). Even with a $1000 hurdle, can you get filled on 25 options without selling at or close to the bid?

Heck yes. I have done 7,000-17,000 options per year, year after year and rarely did anything over 2 delta. 48,000 the last 5 years. And I don't blindly hit the bids.

My biggest volume last year was KC.

Reply With Quote
     

Old February 14th, 2014, 04:31 PM   #3063 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 257 since Oct 2012
Thanks: 126 given, 75 received

Ask


On the /ES sometimes you can even get filled on the ask.

Reply With Quote
     

Old February 14th, 2014, 05:31 PM   #3064 (permalink)
Trading for Fun
St Paul, MN, USA
 
Futures Experience: Advanced
Platform: Abacus
Broker/Data: RJO, Interactive Brokers
Favorite Futures: Commodity Futures & Options
 
Posts: 189 since Jan 2014
Thanks: 108 given, 171 received

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...

Reply With Quote
     

Old February 15th, 2014, 02:07 AM   #3065 (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

Futures Edge on FIO

Are you a NinjaTrader user?

 

CafeGrande View Post
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...

whats your strike rate / r:r (rhetorical question btw)?...........thus.......

can you afford slippage? can you lift offers/hit bids in illiquid markets or need to work both legs to have +ve expectancy?

Reply With Quote
     

Old February 15th, 2014, 10:58 AM   #3066 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,904 received

KC the last few months was not worth trading because nobody wanted to buy calls. That has recently changed with the price rise.

Most of the 2,686 KC options I sold were the Sep 2013 contracts. Dec 2013 I only did 48 contracts. Mar 2014 I only did 2 contracts.

I so miss the days where you could sell KC 300 calls and make 8% ROI.

Reply With Quote
     
The following 2 users say Thank You to ron99 for this post:
     

Old February 18th, 2014, 03:35 AM   #3067 (permalink)
Trading Apprentice
Moscow, Russia
 
Futures Experience: Advanced
Platform: QST, NinjaTrader, MT.
Favorite Futures: Options on futeres of Oil, Gold, ES, Currency
 
Posts: 1 since Feb 2014
Thanks: 19 given, 1 received

Trading options on commodity futures

Hello, Ron!
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,
Alex Gorbunov

Reply With Quote
     
The following user says Thank You to debosh2008 for this post:
     

Old February 18th, 2014, 09:25 AM   #3068 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,904 received

Hi Alex Gorbunov,

I'll pass on the offer.

Ron

Reply With Quote
     

Old February 19th, 2014, 05:30 PM   #3069 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,194 since Jul 2012
Thanks: 1,004 given, 3,965 received

March NG Calls

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!"


Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

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 7 users say Thank You to kevinkdog for this post:
     

Old February 19th, 2014, 05:50 PM   #3070 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,585 since Dec 2013
Thanks: 1,393 given, 2,357 received
Forum Reputation: Legendary


REPORT ON THE NATURAL GAS PRICE SPIKE OF FEBRUARY 2003
STAFF INVESTIGATING TEAM FEDERAL ENERGY REGULATORY COMMISSION JULY 23, 2003
http://www.ferc.gov/legal/maj-ord-reg/land-docs/The-Price-Spike-Report-07-23-03.pdf

Of course we know one of the big losers back in 2003 was Reliant as they had to adjust their earnings forecast based upon an $80 million trading loss.
Reliant Resources to join trading market exodus - Houston Business Journal

Reply With Quote
     
The following 2 users say Thank You to SMCJB for this post:
     

Reply



futures.io > Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



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

NinjaTrader 8: Features and Enhancements, Tips and Tricks

Dec 6
 

Al Brooks: Stop Losing when a Good Trade goes Bad, Correcting Mistakes

Elite only
 

Trading Technologies: Algo Design Lab hands-on

Dec 13
     

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 05:49 PM.

Copyright © 2016 by 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 2016-12-06 in 0.18 seconds with 20 queries on phoenix via your IP 54.163.92.62