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Selling Options on Futures?
Started: by ron99 Views / Replies:583,655 / 5,777
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Selling Options on Futures?

  #3421 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
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SMCJB View Post
Obviously if you have alternative opportunities with higher ROIs exiting the current trade and entering the new trade makes sense. But what about if you don't have other opportunities. Are you still exiting because the risk/reward or ROI is to low now?

I'm still exiting. And here is a perfect example of why.

Legged into short CL Sep 80/130 strangle for .05 for each side on 5/22. Immediately placed GTC order to leg out at .02 for each side. Got filled early June.

If I had kept the 130s the price is now .13.

This doesn't happen a lot, but it can be a killer when it does. So I decided it is better to take the VG ROI now and maybe even just have money in cash or low ROI positions than to risk position going far against me.

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  #3422 (permalink)
Elite Member
United Kingdom
 
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Options Dax


ron99 View Post
I'm still exiting. And here is a perfect example of why.

Legged into short CL Sep 80/130 strangle for .05 for each side on 5/22. Immediately placed GTC order to leg out at .02 for each side. Got filled early June.

If I had kept the 130s the price is now .13.

This doesn't happen a lot, but it can be a killer when it does. So I decided it is better to take the VG ROI now and maybe even just have money in cash or low ROI positions than to risk position going far against me.

Hi Ron, I am new to this thread. Have been trading (writing) Dax , Ftse & Dow Options for a number of years. I haven't been through the full thread but do you have a specific strategy for triggering a trade and most importantly a solid proven method for exiting a trade before it becomes an account blower?

The reason I ask is that over the years I have had great runs and then been hit really hard by the one offs which crop up every once in a while. (sufficient to blow the account.


If there's an area in the thread I could that discusses could you point me in the direction. Best regards.

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  #3423 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
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ijcarruthers View Post
Hi Ron, I am new to this thread. Have been trading (writing) Dax , Ftse & Dow Options for a number of years. I haven't been through the full thread but do you have a specific strategy for triggering a trade and most importantly a solid proven method for exiting a trade before it becomes an account blower?

The reason I ask is that over the years I have had great runs and then been hit really hard by the one offs which crop up every once in a while. (sufficient to blow the account.


If there's an area in the thread I could that discusses could you point me in the direction. Best regards.

Welcome.

On the first page in post#2 is a Quick Summary. In there you will find many of the highlights of this thread. Also be sure to check out the Word doc by Iridium at the bottom of the Quick Summary.

After that read the thread. Many great points in it.

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  #3424 (permalink)
Elite Member
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ron99 View Post
Welcome.

On the first page in post#2 is a Quick Summary. In there you will find many of the highlights of this thread. Also be sure to check out the Word doc by Iridium at the bottom of the Quick Summary.

After that read the thread. Many great points in it.

Thanks will do

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  #3425 (permalink)
Market Wizard
Cleveland, OH
 
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Futures Edge on FIO

ijcarruthers View Post
Thanks will do

Here's a suggestion. In order to make the thread easier to read and shorter, instead of making a new post thanking someone, you should just click the Thanks button in the lower right of a post.

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  #3426 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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Trade Alert

FWIW There is an opportunity to sell milk (Class III) options right now. Sell the Aug 18.75 put for 0.04 or $80. Symbol DA on some systems. There are 150 bid there now. I suspect the person bidding is taking profit on the 362 options that traded (OI increase) on June 3rd between 0.23-0.29.

If kept to expiration the ROI would be about 3% (IM=298 today but should be lower tomorrow). I would recommend buying back at .01 which shouldn't take too long to get there. That should easily get your monthly ROI over 5%. The Joly 18.75s are priced at 0.005 or cabinet.

Milk closes trading at 5pm ET. Reopens at 6pm ET.

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  #3427 (permalink)
Trading for Fun
St Paul, MN, USA
 
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ron99 View Post
If kept to expiration the ROI would be about 3% (IM=298 today but should be lower tomorrow)..

Somewhat related - the madness of futures options margins at Interactive Brokers:

The option referenced above has a $335 IM at IB. That's about 10% above SPAN IM. Not bad given their reputation as an unfriendly broker for option sellers.

But... I was looking at a nat gas put sale today and the IM was $2000. SPAN IM (risk + premium) was $1010, so they're 100% above some of their competitors.

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  #3428 (permalink)
Trading Apprentice
seattle washington usa
 
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thanks for all the great info. Are you going to compete again?

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  #3429 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
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Thanks: 126 given, 75 received

IV

OVX plots real time IV for CL , and VXST plots real time IV for ES. Does anyone know of a real time IV plot for NQ??

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  #3430 (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
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datahogg View Post
OVX plots real time IV for CL , and VXST plots real time IV for ES. Does anyone know of a real time IV plot for NQ??

They keep multiplying.

CBOE - Volatility Indexes (VIX, VXD, VXN, RVX, VXO, VXV, VPD, VPN, GVZ, OVX, VXAPL, VXTH, LOVOL)

There are actually 3 ways to measure CL volatility in addition to ATM IV on a specific contract month:

OIV, OVX and VEU14, VEV14, VEX14 etc.

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