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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,479 / 5,734
Last Reply:4 Hours Ago (01:01 AM) Attachments:642

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Selling Options on Futures?

Old April 10th, 2014, 12:34 PM   #3181 (permalink)
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mixpol View Post
i guess crude oil may exp within 104/97.5? and 110 jun is good to sell? in real acc we may short 114call for greater security

Selling a June CL 114 call is way too close for me. I would rather sell a further strike using a further month. I was looking at the CLQ 130 calls but I did not enter a position yet.

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Old April 10th, 2014, 12:59 PM   #3182 (permalink)
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Selling a June CL 114 call is way too close for me. I would rather sell a further strike using a further month. I was looking at the CLQ 130 calls but I did not enter a position yet.

how many lots do u usially trade ? and what price 130 aug call do u wanna enter at?

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Old April 10th, 2014, 06:55 PM   #3183 (permalink)
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kevinkdog View Post
May Crude is at 103.3 right now. Isn't 104 cutting it close?

For Jun 110 Call is at 10 delta. 114 call is at 4.3. The 10 delta is personally a bit scary...

10-delta in and of itself wouldn't bother me, it's that there is very little time to expiration and very low volatility (around 17% ATM, which is bouncing along a multi-year low). One little blip and you're losing money.

If I were to sell CL calls today, I'd go out a bit in time and away from the money. They're still very low IV, relative to historical data, so don't over-do it in quantity just to get a decent credit into your account.

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Old April 10th, 2014, 08:00 PM   #3184 (permalink)
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mu2pilot View Post
Is anyone else finding there to be slim pickings among Ron type options to sell right now? A majority of the markets seem to be so flat, option prices and ROIs are low. I assume the ebb and flow market results in situations like this from time to time.

Ron, is this a time when there aren't a lot of opportunities to take advantage of?

mu2pilot

PS- I have CL and ZW strangles on presently and am short CC, ES & NQ puts and KC calls, but these were put on a few weeks back.

I am late to this post, but I think the opportunities are pretty good right now, at least in the physical commodity markets I follow. I've attached a snapshot of ATM IV history from the beginning of the year through yesterday. Each figure is the average of the 30 day, 60 day and 90 day "constant maturity" IV for that day - a hypothetical contract interpolated from the real ones. In the FX market I think they call these "tenors."

Anyway, while crude is a dog and the craziness in nat gas was short-lived, there should be some current opportunities in coffee, sugar, corn, wheat, hogs and nat gas. And the growing season is just getting started so corn, beans and soymeal are highly likely to become more volatile in the near future and wheat will go along for the ride.

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Selling Options on Futures?-atm-iv-avgs.png  
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Old April 10th, 2014, 09:08 PM   #3185 (permalink)
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CafeGrande View Post
I am late to this post, but I think the opportunities are pretty good right now, at least in the physical commodity markets I follow. I've attached a snapshot of ATM IV history from the beginning of the year through yesterday. Each figure is the average of the 30 day, 60 day and 90 day "constant maturity" IV for that day - a hypothetical contract interpolated from the real ones. In the FX market I think they call these "tenors."

Anyway, while crude is a dog and the craziness in nat gas was short-lived, there should be some current opportunities in coffee, sugar, corn, wheat, hogs and nat gas. And the growing season is just getting started so corn, beans and soymeal are highly likely to become more volatile in the near future and wheat will go along for the ride.

I am finding fills and decent trades VERY hard to come by lately

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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Old April 10th, 2014, 10:17 PM   #3186 (permalink)
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kevinkdog View Post
I am finding fills and decent trades VERY hard to come by lately

I think it's all Dudetooth's fault. Many are using his great Excel application, and like indicators and chart patterns, the advantage is quickly lost. (Just kidding, although there might be a grain of truth if more people are trying to sell the same options.)

I'm not saying the opportunities are great, but they're better than they were at the end of last year or the beginning of this year in the commodities I follow. I try to stay flexible with strategy, i.e. if a number of commodities have already had a pretty sharp climb (they have) and volatility is decent (it is, in several commodities), then I might become more of a volatility seller on both sides of the market, rather than taking a one-direction view.

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Old April 11th, 2014, 10:26 AM   #3187 (permalink)
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kevinkdog View Post
I am finding fills and decent trades VERY hard to come by lately

I'm still seeing the same thing. Many times the SPAN prices and ROIs are not achievable or are for markets where you can't trade any decent size like HG. There appear to be a few opportunities and I am continuing to pursue them.

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Old April 11th, 2014, 10:34 AM   #3188 (permalink)
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mu2pilot View Post
I'm still seeing the same thing. Many times the SPAN prices and ROIs are not achievable or are for markets where you can't trade any decent size like HG. There appear to be a few opportunities and I am continuing to pursue them.

I gave up on HG a long time ago - really low volume.

The reason I say I am having fill trouble is that 6 months ago when I'd place an order in the morning, at a limit price of yesterday's settlement, I had a reasonable chance of getting filled. Now, those fills don't seem to be happening.

It is not like people are jumping in front of me at a better price, either. Many times, I am stuck as the best ask, and there are just 0 trades that day...


Although, yesterday, I was filled on a Cotton call above the previous day's settlement, when Cotton had fallen over $1. Someone really wanted to buy, apparently!

I am slowly migrating from a lot of diversification (5% max margin per instrument, maybe sell 8-10 instruments) to higher percentages, less instruments. Maybe that will help...

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
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Old April 12th, 2014, 12:46 PM   #3189 (permalink)
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MJ888 View Post
Selling a June CL 114 call is way too close for me. I would rather sell a further strike using a further month. I was looking at the CLQ 130 calls but I did not enter a position yet.

Gyazo - b0ac61d7a38f3629f2afc19e03ac6d71.png i'm gonna think to put these spreads in

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Old April 12th, 2014, 02:54 PM   #3190 (permalink)
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kevinkdog View Post
The reason I say I am having fill trouble is that 6 months ago when I'd place an order in the morning, at a limit price of yesterday's settlement, I had a reasonable chance of getting filled. Now, those fills don't seem to be happening.

It is not like people are jumping in front of me at a better price, either. Many times, I am stuck as the best ask, and there are just 0 trades that day...

Although, yesterday, I was filled on a Cotton call above the previous day's settlement, when Cotton had fallen over $1. Someone really wanted to buy, apparently!

Just have to be a bit patient to get the fills at prices you like. I too have often times placed my order but on many days nothing happens. But I refuse to lower my ask and I certainly know better than to move to a strike closer to the money just to get filled. Getting filled at these far out strikes at the price you want requires a certain amount of market timing but the profits are still there to be had. Patience patience patience........

My May cotton 110 calls expired yesterday! Wooo Hooo!

Back on March 26th, I was able to sell a bunch of July cotton 120 calls at 0.29 which are worth 0.11 now, so a nice profit so far.

Also back on February 24th, I was able to sell a bunch of July Sugar 24 calls at 0.06 which are now trading at 0.03 so those are doing okay too.

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