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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,200 / 5,727
Last Reply:December 2nd, 2016 (12:40 PM) Attachments:642

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Selling Options on Futures?

Old July 19th, 2014, 06:57 PM   #3491 (permalink)
Trading Apprentice
Los Angeles, CA
 
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Soybean gap?

Can someone more knowledgeable about Soybeans explain to me why ZS gapped down on 6/24 when we rolled to the current contract?

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Old July 20th, 2014, 11:08 AM   #3492 (permalink)
Market Wizard
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ron99 View Post
While the totals are higher, most of the growth is in exotic options including options that aren't traded on Globex. OI for options on CL, NG, RB, HO, C, S, GC, ES are lower compared to last year. CL is down by over 50% compared to 3 years ago.

I suspect some of the drop in CL is due to its replacement as the world oil benchmark by Brent. "Dated Brent" always was the worlds physical benchmark, but I believe Brent is now it's finanical benchmark as well.

When Demand>Supply barrels still came across the Atlantic into the Gulf and up pipelines into mid-america. Hence WTI was still market linked - and often the 'premium' barrel in the world.

Then Supply>Demand and you had a surplus of barrels in mid-america that had no home and no where to go. Hence WTI became detached from world oil markets.

Now pipelines have been reversed and oil flows from mid-america down to the Gulf Coast and WTIs relationship (although now a different one) has been reestablished with world oil markets.

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Old July 20th, 2014, 11:49 AM   #3493 (permalink)
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effective View Post
Thanks for sharing your trade. How do you handle stop loss order in IB? Manually or through contingent order?

Both are fine, if you're comfortable daytrading and disciplined with stop no "just an extra 2c more above my stop.." mentality then manual is fine. I like to watch videos with alerts on so I use contingent with condition of LAST => 10c (your stop), BUY @ MARKET, DAY ORDER, no trigger outside RTH. Most you will lose is an extra 1c with a very fast moving market. If you use limit for 10c you might miss it at a very fast market and lose a few cents extra. Only for something as liquid as SPY near the money options..anything with spread more than 2 ticks I wouldn't do this.

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Old July 20th, 2014, 12:15 PM   #3494 (permalink)
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k20a View Post
Both are fine, if you're comfortable daytrading and disciplined with stop no "just an extra 2c more above my stop.." mentality then manual is fine. I like to watch videos with alerts on so I use contingent with condition of LAST => 10c (your stop), BUY @ MARKET, DAY ORDER, no trigger outside RTH. Most you will lose is an extra 1c with a very fast moving market. If you use limit for 10c you might miss it at a very fast market and lose a few cents extra. Only for something as liquid as SPY near the money options..anything with spread more than 2 ticks I wouldn't do this.

This is good. I just started doing some of this with naked puts. What do you mean by Tuesday expirations? I have never seen any of these. What instrument has these?

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Old July 21st, 2014, 03:25 AM   #3495 (permalink)
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Blaine View Post
This is good. I just started doing some of this with naked puts. What do you mean by Tuesday expirations? I have never seen any of these. What instrument has these?

VIX indices and a few of its derivatives are Tuesday expiries.

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Old July 24th, 2014, 05:11 PM   #3496 (permalink)
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Great forum! Good job!

Hi everyone...I just wanted to thank all those who have contributed to this thread! A "big" thank you to @ron99 for sharing so many of the things he has learned along the way. I came across this thread last Sept/Oct and have been reading as time would allow. A few weeks ago I began reading from the beginning to better understand the thought process as this has developed. I started trading options in '07 -- I am sure I joined the ranks of many -- made a lot but also lost a lot. 2007 was a fabulous yr. selling premium for me but got caught in the whip of '08. I then lived abroad for nearly 4.5 yrs so I am now looking at selling futures options. I still have many questions and am almost completely through the complete thread.

Keep up the good work everyone...keep posting and hopefully someday I will be able to contribute to this great forum too! Thanks again to all who have made this a great place.

RB

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Old July 25th, 2014, 09:40 AM   #3497 (permalink)
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Margin on CC

How is the SPAN margin for CC Z (dec) 4 Put strike 2700?
Zaner360 show 935$

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Old July 25th, 2014, 09:46 AM   #3498 (permalink)
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uuu1965 View Post
How is the SPAN margin for CC Z (dec) 4 Put strike 2700?
Zaner360 show 935$

Must be something wrong. $935 is actually full margin. SPAN should be $164

I'd call your broker or the trade desk.

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 July 29th, 2014, 09:55 AM   #3499 (permalink)
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Griffith View Post
Can someone more knowledgeable about Soybeans explain to me why ZS gapped down on 6/24 when we rolled to the current contract?

Because the contract that went off was old crop beans and the new contract is for new crop beans which is having a great growing season and thus lower in price.

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Old August 1st, 2014, 11:26 AM   #3500 (permalink)
World'sWorstTrader
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Interesting Article


Cold hard facts and proof that selling far OTM options at 30 DTE is a BIG MISTAKE - Trading Talk - Livevol Community


Interesting article. Seems to agree with most of Ron99's ideas.

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