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Selling Options on Futures?
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Selling Options on Futures?

  #351 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received

Ron,

I am pretty familiar with what constitutes good fundamentals for a publicly-listed company. When you say you are primarily concerned with the fundamentals of a commodity, what exactly are you looking at? And is there a particular place (book, magazine, website, analyst blog) that you get your info to study? Do you look at the info and form your own directional opinions. or do you subscribe to a commodity analyst service?

Thanks!

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  #352 (permalink)
Elite Member
Milton Keynes UK
 
Futures Experience: Intermediate
Platform: Investor/RT, Sierra Chart
Favorite Futures: Futures Options, CL
 
Posts: 156 since Jun 2009
Thanks: 74 given, 115 received

Year End Review

As the year draws to an end and my first year of option trading too, (I sold my first ever in feb 2012), I thought it might be of interest to review my progress so far.

I sold mainly CL, but also NG , KC, ZS, ZC, GC, ES, TF & EUR futures options within my Interactive Brokers UK Pension Account. I also bought some CL calls which helped to boost my returns.

As these are all $ demominated trades, I first had to convert my Pounds Sterling into Dollars using IB's IdealPro and then to prevent any currency risk I hedged by buying enough GBP (6B) futures to cover the amount I converted.

The end result of 10 months tentative trading with very little done over the last two months has been a total account gain of 23.2%. I am very pleased with this (Buffet level) performance and realize I can do even better next year.

I would like to thank Ron for all his help in answering everyones questions and I wish everyone All The Best for Christmas and the New Year.

Brit

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  #353 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,365 since Jul 2012
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britkid99 View Post
As the year draws to an end and my first year of option trading too, (I sold my first ever in feb 2012), I thought it might be of interest to review my progress so far.

I sold mainly CL, but also NG , KC, ZS, ZC, GC, ES, TF & EUR futures options within my Interactive Brokers UK Pension Account. I also bought some CL calls which helped to boost my returns.

As these are all $ demominated trades, I first had to convert my Pounds Sterling into Dollars using IB's IdealPro and then to prevent any currency risk I hedged by buying enough GBP (6B) futures to cover the amount I converted.

The end result of 10 months tentative trading with very little done over the last two months has been a total account gain of 23.2%. I am very pleased with this (Buffet level) performance and realize I can do even better next year.

I would like to thank Ron for all his help in answering everyones questions and I wish everyone All The Best for Christmas and the New Year.

Brit


Awesome! Good for you! Do you find you have issues with big bid/ask spreads on some of these instruments?

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  #354 (permalink)
Elite Member
Milton Keynes UK
 
Futures Experience: Intermediate
Platform: Investor/RT, Sierra Chart
Favorite Futures: Futures Options, CL
 
Posts: 156 since Jun 2009
Thanks: 74 given, 115 received


kevinkdog View Post
Awesome! Good for you! Do you find you have issues with big bid/ask spreads on some of these instruments?

Kevinkdog,

Yes, that can be a problem on the less liquid issues. I think that's why I prefer CL, so long as price isn't screaming, there is usually a quick fill at mid-price. The less liquid need to be deep OTM and left till expiry, so no spread then.

Brit

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  #355 (permalink)
Elite Member
Springfield, MO
 
Futures Experience: Intermediate
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May be of interest to someone

Interviews of a "successful, large retail options trader". This may be of interest to someone or maybe not.

https://www.tastytrade.com/tt/search?utf8=%E2%9C%93&search=karen+supertrader

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  #356 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received

Britkid99,

I couple of months ago you mentioned that you were getting emails and the newsletter from James Cordier. What's your opinion of the value of his advice? Is he reasonably accurate?

Thanks

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  #357 (permalink)
Elite Member
Milton Keynes UK
 
Futures Experience: Intermediate
Platform: Investor/RT, Sierra Chart
Favorite Futures: Futures Options, CL
 
Posts: 156 since Jun 2009
Thanks: 74 given, 115 received


psears View Post
Britkid99,

I couple of months ago you mentioned that you were getting emails and the newsletter from James Cordier. What's your opinion of the value of his advice? Is he reasonably accurate?

Thanks

I still get them but they are a bit erratic, not received anything for a while now. I would say his opinions and market reading generally seem sensible and logical. He often shows seasonality charts from MRCI to back up his arguments.

It is difficult to get much information on selling futures options so I take whatI can find. If you sign up for the newsletter you can download the old ones as well and check his calls historically.

Brit

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  #358 (permalink)
Trading Apprentice
Medellin
 
Futures Experience: Beginner
Platform: non
Favorite Futures: options in futures
 
Posts: 32 since Apr 2012
Thanks: 36 given, 12 received

My Results for 2012

I also would like to share my results for this year. I started trading, with a very modest account, in April this year. In my first 2 months I had lost 40% of my investment. Then, things started to change and in the last 6 months, I came up with a total of 60% gain for the whole year.

I believe I got lucky the second half of the year. I mainly sold corn (I lost a lot with the drought, then gain back some), soybeans, natural gas and coffee.

Merry Christmas everybody and thanks for your valuable input in this forum.

Alfredo E.

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  #359 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
Broker/Data: Options Express
Favorite Futures: Options on Futures
 
MJ888's Avatar
 
Posts: 165 since Sep 2012
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Great Thread

I am glad that I found this thread. I too have been selling options on commodities but I have yet to have the success that ron99 has achieved. My lack of success is due directly to not having enough discipline and patience to follow a simple trading plan. During the past several months I have done some intense self-evaluation and I have identified why I keep sabotaging myself and I am ready to fix my discipline issues so I can have a profitable 2013.


I too have read Cordier's options selling book and followed their recommendation to look for strikes with a lower than 0.20 delta but it seems that that is still too close. I have no problem going even farther out and looking for strikes with deltas below 0.04 but here is another question, what is your stop loss ron99 because let's say you sold the April CL 120 call for 0.13 premium ($130) with a delta of 0.0268, where is your stop loss? Cause if you follow Cordier and exit when the premium doubles to 0.26, wouldn't you be exiting a lot? How much heat are you willing to take? Do you use a percentage? Or do you base your stop loss on market conditions and how many days are left until expiration?

I currently using IB and I find that the margin requirements at very very high compared to other places, this is bad for my ROI.

I took a quick look at OX and saw their commission rates for options on futures is $12.99 for 1-40 contracts/month. Is that a flat fee or does that mean for every option I sell it is $12.99 each? Cause if it is $12.99 each that is very very very high. To sell one April CL 120 call at IB the commission would be $2.32 one way if I allow it to expire worthless. It would cost me another $2.32 to cover should I need to. That is $4.64 round-turn at IB. So the same trade at OX would cost me $25.98? Or am I wrong?

Speaking of James Cordier, I got a newsletter from him last week talking about selling OTM puts on silver.

Thoughts please!

Thanks!


Last edited by MJ888; December 23rd, 2012 at 06:22 PM.
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  #360 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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psears View Post
Britkid99,

I couple of months ago you mentioned that you were getting emails and the newsletter from James Cordier. What's your opinion of the value of his advice? Is he reasonably accurate?

Thanks

I kept track of Liberty's trades for several years. From 2005 to Dec 2011.

He was running about 76% profitable trades.

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