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Selling Options on Futures?
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Selling Options on Futures?

  #3161 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 270 since Oct 2012
Thanks: 126 given, 75 received

High


New Level View Post
Well I haven't made a real money trade yet but after reading this whole thread I feel like I've been in the trenches with you guys for a while. Thanks to all who have contributed! I found options through tasty trade and then found this thread and I've been consuming everything I can find on options and paper trading ever since. I'll be opening an account with DeCarley soon and plan on keeping things very small and manageable until I have some experience under my belt. As I progress I hope to have some substance to add to the conversation here. I noticed that DeCarley has several levels of service/commissions , from full service at $35 to self directed Pro at $7, as a new trader would a higher service level be worth it?

These are excessively high commissions.

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  #3162 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,362 since Jul 2012
Thanks: 1,111 given, 4,292 received
Forum Reputation: Legendary


New Level View Post
Well I haven't made a real money trade yet but after reading this whole thread I feel like I've been in the trenches with you guys for a while. Thanks to all who have contributed! I found options through tasty trade and then found this thread and I've been consuming everything I can find on options and paper trading ever since. I'll be opening an account with DeCarley soon and plan on keeping things very small and manageable until I have some experience under my belt. As I progress I hope to have some substance to add to the conversation here. I noticed that DeCarley has several levels of service/commissions , from full service at $35 to self directed Pro at $7, as a new trader would a higher service level be worth it?

I suggest you talk to Carley directly to get commission rates.There are a lot of options with different FCMs and different platforms, many of which will impact your cost.

Something else to consider is how they charge commissions. Some brokers charge all at the beginning, and some charge both for entry and exit. That may be an important consideration if you exit before expiration.

Another issue to investigate is how "option selling friendly" the broker is. Some deep discount brokers I found were dirt cheap, but did not want option sellers (they felt it was too much risk). Not many brokers are accomodating to option selling.

I can tell you from my personal experience that DeCarley overall prices are very reasonable. Service has been world class. That alone is worth it, in my opinion.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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  #3163 (permalink)
Elite Member
Amsterdam
 
Futures Experience: None
Platform: J.A.R.V.I.S.
Favorite Futures: N/A
 
Cogito ergo sum's Avatar
 
Posts: 193 since Jul 2010
Thanks: 211 given, 157 received



New Level View Post
Well I haven't made a real money trade yet but after reading this whole thread I feel like I've been in the trenches with you guys for a while. Thanks to all who have contributed! I found options through tasty trade and then found this thread and I've been consuming everything I can find on options and paper trading ever since. I'll be opening an account with DeCarley soon and plan on keeping things very small and manageable until I have some experience under my belt. As I progress I hope to have some substance to add to the conversation here. I noticed that DeCarley has several levels of service/commissions , from full service at $35 to self directed Pro at $7, as a new trader would a higher service level be worth it?

If you intend to execute a specific trading system in a live environment (such as selling OTM options) with predetermined rules I personally don't see any real value added to go full service. In addition, a $35 RT commission for a "small account" can destroy your theoretical edge and can negatively skew your returns depending on your strategy and trade size. I recommend that you model your paper trades with both commission structures to see where you stand from a pure financial point of view.

Broker selection is a different discussion altogether.

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  #3164 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
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Favorite Futures: futures
 
Posts: 2,362 since Jul 2012
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Cogito ergo sum View Post
If you intend to execute a specific trading system in a live environment (such as selling OTM options) with predetermined rules I personally don't see any real value added to go full service. In addition, a $35 RT commission for a "small account" can destroy your theoretical edge and can negatively skew your returns depending on your strategy and trade size. I recommend that you model your paper trades with both commission structures to see where you stand from a monetary point of view. As for selecting a broker is a completely different discussion alltogether.

Good points. Make sure you don't pay for more than what you need.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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  #3165 (permalink)
Trading Apprentice
NYC +NY/ United States
 
Futures Experience: Advanced
Platform: OptionsXpress
Favorite Futures: Future Option Selling
 
Posts: 26 since Mar 2014
Thanks: 13 given, 7 received

Hmm, so things got interesting after Friday's market moving jobs data report. Gold shot up quite a bit, the S&P Index took it a sharp dive, and unrelated to the market, coffee futures skyrockets over $10.00 in a day. Nasdaq was rocked too.

Looks like volatility is back in action, creating some good option selling premium. How are you guys going to play it?

I'm thinking of selling some S&P puts, and perhaps a couple of coffee calls at the very high range, (over 300). Time to make hay fellas!

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  #3166 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 270 since Oct 2012
Thanks: 126 given, 75 received

Last Thursday 04/03


Zero85 View Post
Hmm, so things got interesting after Friday's market moving jobs data report. Gold shot up quite a bit, the S&P Index took it a sharp dive, and unrelated to the market, coffee futures skyrockets over $10.00 in a day. Nasdaq was rocked too.

Looks like volatility is back in action, creating some good option selling premium. How are you guys going to play it?

I'm thinking of selling some S&P puts, and perhaps a couple of coffee calls at the very high range, (over 300). Time to make hay fellas!

I sold some NQ NQM4 2810 puts @ $76.00. 76 DTE. Delta=0.022 , IM= 417 (Per TOS).

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  #3167 (permalink)
Banned: Rude behavior, doesn't want to be here
Zug / Switzerland
 
Futures Experience: Advanced
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datahogg View Post
I sold some NQ NQM4 2810 puts @ $76.00. 76 DTE. Delta=0.022 , IM= 417 (Per TOS).

And what is your stop loss? Level on the script or how do you define your stop loss when shorting any options?

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  #3168 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 270 since Oct 2012
Thanks: 126 given, 75 received

Stop Loss


Stan Dan View Post
And what is your stop loss? Level on the script or how do you define your stop loss when shorting any options?

My drop dead stop loss is that given by RON99. But I may make adjustment before that.

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  #3169 (permalink)
Elite Member
hk
 
Futures Experience: Intermediate
Platform: NinjaTrader
 
Posts: 48 since Apr 2010
Thanks: 16 given, 12 received


kevinkdog View Post
I suggest you talk to Carley directly to get commission rates.There are a lot of options with different FCMs and different platforms, many of which will impact your cost.

Something else to consider is how they charge commissions. Some brokers charge all at the beginning, and some charge both for entry and exit. That may be an important consideration if you exit before expiration.

Another issue to investigate is how "option selling friendly" the broker is. Some deep discount brokers I found were dirt cheap, but did not want option sellers (they felt it was too much risk). Not many brokers are accomodating to option selling.

I can tell you from my personal experience that DeCarley overall prices are very reasonable. Service has been world class. That alone is worth it, in my opinion.

Any option selling friendly broker suggestion ?

Sent from my GT-N7105 using Tapatalk

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  #3170 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,362 since Jul 2012
Thanks: 1,111 given, 4,292 received
Forum Reputation: Legendary



energetic View Post
Any option selling friendly broker suggestion ?

Sent from my GT-N7105 using Tapatalk

I use DeCarley (through Gain) and OptionsExpress. I'm happy with both.

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