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Selling Options on Futures?
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Selling Options on Futures?

  #3551 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
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Favorite Futures: ES, NQ, CL, /6E futures options.
 
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daydayup8 View Post
That does help, thank you. Do they allow to selling ES option in an IRA acct? what about their margin? can you check the margin for selling ES 1850 PUT with expiration SEP 12?

Sorry I am late in responding. I have been busy. I don't think TOS allows naked puts in an IRA.

The ESZ4/EW4U4 1850 put (this morning 08/25/14) sells for $132.50 (one contract) with an expiration date
of 09/27/14, a delta of 0.064, and an IM = $2614 (one contract).

But for me this is too close to ES=1998. Too much risk. Also the ratio of (IM)/(premium sold) = 19.7
is too high.

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  #3552 (permalink)
Elite Member
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Thank you, I checked IB, the IM=6782, MM=5426, I will transfer my money out for sure after reading about 60 pages of this thread so far:-)

Interesting quick way to measure the position, 132.5/2614=19.7 is too high, then what is the general number you use, do you mind to share? thanks!

Forgive me if this topic has been covered, maybe I should not ask so many questions before I finish this thread, just so much good information and so many great minds here:-)

PS: after reading a few more pages here, I feel like this number is around 16.


datahogg View Post
Sorry I am late in responding. I have been busy. I don't think TOS allows naked puts in an IRA.

The ESZ4/EW4U4 1850 put (this morning 08/25/14) sells for $132.50 (one contract) with an expiration date
of 09/27/14, a delta of 0.064, and an IM = $2614 (one contract).

But for me this is too close to ES=1998. Too much risk. Also the ratio of (IM)/(premium sold) = 19.7
is too high.



Last edited by daydayup8; August 25th, 2014 at 01:49 PM.
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  #3553 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 261 since Oct 2012
Thanks: 126 given, 75 received



daydayup8 View Post
Thank you, I checked IB, the IM=6782, MM=5426, I will transfer my money out for sure after reading about 60 pages of this thread so far:-)

Interesting quick way to measure the position, 132.5/2614=19.7 is too high, then what is the general number you use, do you mind to share? thanks!

Forgive me if this topic has been covered, maybe I should not ask so many questions before I finish this thread, just so much good information and so many great minds here:-)

PS: after reading a few more pages here, I feel like this number is around 16.

I may be mistaken, but I think Ron99 indicates the ratio of (IM)/(premium sold) < = 6 . Generally smaller is better.

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  #3554 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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Favorite Futures: Options on Futures
 
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datahogg View Post
I may be mistaken, but I think Ron99 indicates the ratio of (IM)/(premium sold) < = 6 . Generally smaller is better.

I have never done the ratio calculation. I look at delta and monthly ROI.

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  #3555 (permalink)
Elite Member
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Ron,

By reading so far on the 100+ page (I am still on 100+ pages now), I always see you have a quick ROI monthly on you positions, do you use some tools to calculate that for you? forgive me if this has been answered. Thanks.

PS: you answered in next post, it seems that you calculate it by yourself.




ron99 View Post
Based on that credit I'm assuming you are doing 10 contracts.

Delta .0230. ROI based on my fees is 2.0% per month.

They're OK. ES may drop but I doubt it will drop enough in 32 days to force you out.

I sold 1250s on Friday.


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  #3556 (permalink)
Trading for Fun
St Paul, MN, USA
 
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daydayup8 View Post
Ron,

By reading so far on the 100+ page (I am still on 100+ pages now), I always see you have a quick ROI monthly on you positions, do you use some tools to calculate that for you? forgive me if this has been answered. Thanks.

PS: you answered in next post, it seems that you calculate it by yourself.

Forgive my rudeness for jumping in here, but maybe it will save you some time.

https://futures.io/options-cfd-trading/29125-pc-span.html

Go to 'summary' - I think it's the 2nd post in the thread and scroll down until you see a link by forum member "DudeTooth" that says PC-SPAN.xls, last updated 12 Aug 2014.

That tool will calculate ROI (and margin and other things) on existing or potential positions with updates at the end of every market day. It's the greatest thing since sliced bread.

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  #3557 (permalink)
Market Wizard
Cleveland, OH
 
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daydayup8 View Post
Ron,

By reading so far on the 100+ page (I am still on 100+ pages now), I always see you have a quick ROI monthly on you positions, do you use some tools to calculate that for you? forgive me if this has been answered. Thanks.

PS: you answered in next post, it seems that you calculate it by yourself.

The formula is in the Quick Summary on page one of this thread.

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  #3558 (permalink)
Elite Member
tennessee/USA
 
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Such a great thread with such great people in such a great forum, can't help saying that!
Cheers~

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  #3559 (permalink)
Elite Member
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ron99 View Post
I do find myself trading put options in CL that are $20-25 away from futures and $25-30 away on calls and ignoring delta for CL. Trading closer than that is just too risky for me.

Ron - why do you ignore delta for CL ?

Another q, pls : if an option that was around 0.03 delta when you sold it uses up all your 3x margin excess, roughly what will its delta typically have become at that stage ? 'Trying to understand how many futures contracts would protect the position, although I realise this is dynamic.

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  #3560 (permalink)
Market Wizard
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jtrade View Post
Ron - why do you ignore delta for CL ?

Another q, pls : if an option that was around 0.03 delta when you sold it uses up all your 3x margin excess, roughly what will its delta typically have become at that stage ? 'Trying to understand how many futures contracts would protect the position, although I realise this is dynamic.

I ignore delta for CL because it is not unusual to have CL make a $10 move. If I am closer than $20 then I will get in trouble if that happens. The deltas for CL just seem too low to me.

I don't know the answer to the 2nd question. You're right there are a lot variables to determine that answer.

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