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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,332 / 5,728
Last Reply:December 6th, 2016 (05:26 PM) Attachments:642

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Selling Options on Futures?

Old November 13th, 2012, 09:41 AM   #301 (permalink)
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t jay View Post
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.

Sounds like the article you read was the same thing.

Got to love the farmers mentality; last year prices were high due to shortages so lets grow loads this year and make a bomb - Oh there's a supply glut and the bottom just fell outta the market - Doh

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Old November 15th, 2012, 06:53 PM   #302 (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.

A 185 call is way too close to ITM to be safe. That's a .1304 delta now.

The crop coming up is the "low" year. Every other year the trees produce more. The crop just harvested was the good or higher production year.

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Old November 15th, 2012, 06:55 PM   #303 (permalink)
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Why is it that I get emails telling me there are new posts in the thread then they quit coming even though there are more new posts? It still says I am subscribed to the thread.

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Old November 15th, 2012, 06:58 PM   #304 (permalink)
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britkid99 View Post
Around the close on Wednesday when ES was 1402, I noticed it was possible to sell 1420 call and 1380 put for 2.00 points each or $200 per strangle. This seemed a good return for 2 days of risk and 20 points movement each way.
Thursday open saw a high of 1416.75 which was getting a bit close and the call had doubled then it sold off nicely, the low of 1397.5 occured today so the puts were never really challenged.

The latest email from James Cordier is prepping for Coffee puts although he doesn't mention any strikes, looks interesting though as I am looking for something to sell.

Brit

I will sell options on expiration day if there are bids far enough OTM for me to be comfortable. Your trade worked but 20 points is risky. Glad it worked for you.

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Old November 15th, 2012, 07:01 PM   #305 (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.

If your strike is close to ITM the margin doesn't drop much on the ICE softs. Further OTM it does drop.

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Old November 15th, 2012, 07:07 PM   #306 (permalink)
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t jay View Post
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.

Futures at 3.00 and you sold 3.10 calls? One day you will get burned badly doing that.

I hope I am not coming on too strong, but I have seen too many trades like that wipe out a trader. I hope you take this as cordial advise.

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Old November 15th, 2012, 07:11 PM   #307 (permalink)
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Good News!

CME is lowering margins on several contracts effective next Wed 11/21.

GC down 18%
SI down 28%
NG down 10%
LC down 17%
LH down 16%

http://www.cmegroup.com/tools-information/lookups/advisories/clearing/files/Chadv12-498.pdf

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Old November 16th, 2012, 12:32 AM   #308 (permalink)
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ron99 View Post
A 185 call is way too close to ITM to be safe. That's a .1304 delta now.

The crop coming up is the "low" year. Every other year the trees produce more. The crop just harvested was the good or higher production year.

Just for the record , here is a quote from ICO Oct,2012 report. Crop year 2012/13 has now started in all exporting countries, and on the basis of the information
currently available, total production is estimated at around 147 million bags, compared to 134.5 million
bags in 2011/12. The majority of this increase can be attributed to the on‐year in the biennial cycle of
Arabica production in Brazil.
Tx for the input on the call, 185 probably is too close as we are buying a march call months away.

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Old November 16th, 2012, 09:32 AM   #309 (permalink)
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I currently have KC Feb 200 Call & 135 Put on...so far so good.

Looking at the April GC 1400 Puts... Delta .0296

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Old November 16th, 2012, 09:36 AM   #310 (permalink)
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ron99 View Post
Why is it that I get emails telling me there are new posts in the thread then they quit coming even though there are more new posts? It still says I am subscribed to the thread.

They send you a e-mail when there is a new post, then don't send another one until you have logged in & out .

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