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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,890 / 5,728
Last Reply:11 Hours Ago (05:26 PM) Attachments:642

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Selling Options on Futures?

Old December 13th, 2012, 03:16 PM   #341 (permalink)
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psears View Post
It sounds like their trades have a much lower probability of success compared to what you are putting on. What are you doing that is different? Are their trades based solely on seasonal trends, where yours are a combination of technicals and fundamentals and seasonals? I would most likely use seasonal info as one of many (maybe 4 or 5) indicators in determining trend direction and trade quality.

Thoughts?

p.s. I am thinking about purchasing the 2013 Commodities Traders Almanac. Any thoughts?




I've tried adding indicators to MRCI data, without luck. Hopefully you'll do better than me, though.

The data that MRCI provides can be a good start for a trading system. I don't use it 100% as presented, and after a number of years I am quite happy with the results (except for this year, when the drought caused havoc).


Last edited by kevinkdog; December 13th, 2012 at 03:39 PM. Reason: added last paragraph
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Old December 13th, 2012, 09:48 PM   #342 (permalink)
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ron99 View Post
I was up 48% in 2010. I am up 78% in 2011. Probably 60% of my gain is buying options and 40% is selling options.

Selling options is a safer and more consistent gain. Buying options for me is riskier, but there is potential for more gain.

None of my option trading is day trading. When I sell options I usually keep them to expiration.

Ron,

do you consider Commitment of Traders Report in your decision making??

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Old December 13th, 2012, 10:48 PM   #343 (permalink)
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psears View Post
It sounds like their trades have a much lower probability of success compared to what you are putting on. What are you doing that is different? Are their trades based solely on seasonal trends, where yours are a combination of technicals and fundamentals and seasonals? I would most likely use seasonal info as one of many (maybe 4 or 5) indicators in determining trend direction and trade quality.

Thoughts?

p.s. I am thinking about purchasing the 2013 Commodities Traders Almanac. Any thoughts?

After looking at MRCI's suggested trades I eliminate 90% of them. Too short time frame. Not consistent results. Commodity that I don't trade. Bad fundamentals this year. Poor suggestion.

Plus if I am selling options based on that suggested MRCI trade I will have far more winners because I am far out of the money. They are doing ATM futures.

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Old December 13th, 2012, 10:57 PM   #344 (permalink)
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gold101 View Post
Ron,

do you consider Commitment of Traders Report in your decision making??

Some. But it is down the priority list.

I use the futures only DCOT. I feel it gives me better direction than if you include options. I compile the data into a large spreadsheet and compare the week to week changes in the data. I keep track of what the futures closed at on the Tuesday of the report. These things are then charted together.

I mainly look at what the Managed Money is doing. If you see a strong futures move and the managed money is adding longs week after week, then I am confidently selling puts.

Like this summer. Managed money was buying Soybean futures like crazy. I sold puts.

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Old December 13th, 2012, 11:56 PM   #345 (permalink)
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ron99 View Post
I was up 48% in 2010. I am up 78% in 2011. Probably 60% of my gain is buying options and 40% is selling options.

Selling options is a safer and more consistent gain. Buying options for me is riskier, but there is potential for more gain.

None of my option trading is day trading. When I sell options I usually keep them to expiration.


Ron,

I generally look at what the commercials are doing for they are what the real market is. I have not sold puts using that info but I am inclined to incorporate that info in my decisions.

Other thing I want to try is to look at the P n F charts to see the price action??

any idea about that.


Ash

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Old December 14th, 2012, 03:17 PM   #346 (permalink)
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gold101, I don't use technicals at all so I can't give you an answer on that.

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Old December 14th, 2012, 11:02 PM   #347 (permalink)
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t jay View Post
Yes , I still have my 310 Dec HO calls. 4 trading days left , am still bearish on Energy in general so see what happens. Also sold a couple of Dec 384 Copper calls. Went down much like you said about RB options, Did not sell for what I wanted , but not too far away.
One thing I place a lot of value in but is not discussed here a lot is Market View/Sentiment. Still bearish because despite Middle East trauma , and other factors price of Oil really hasn't done to much. Up 2.5 , then down 2.5.
Chime in boys , your thoughts and opinions on this little discussed trend indicator.


can we not look at skew in put and call options to see where the sentiment is??

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Old December 15th, 2012, 04:14 PM   #348 (permalink)
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Ron,

You don't use any technicals at all?

So basically your strategy is to determine where the larger, managed money cash flows are heading (via Commitment of Traders report?) and then sell options opposite of that?

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Old December 16th, 2012, 12:13 PM   #349 (permalink)
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psears View Post
Ron,

You don't use any technicals at all?

So basically your strategy is to determine where the larger, managed money cash flows are heading (via Commitment of Traders report?) and then sell options opposite of that?

As I said earlier, the DCOT is down on the priority list. It's fundamentals far ahead of the rest. Followed by seasonals, general economic conditions, DCOT, in that order.

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Old December 16th, 2012, 12:18 PM   #350 (permalink)
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gold101 View Post
can we not look at skew in put and call options to see where the sentiment is??

How do you determine if someone is
1. buying a call because he thinks the market is going up or
2. buying a call for risk protection because he sold a future?

They have totally different sentiments but did the same thing in options.

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