Selling Options on Futures? (Page 360) - Options on Futures | futures.io
futures.io futures trading
 

Go Back   futures.io

> Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures


Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:567,733 / 5,727
Last Reply:3 Hours Ago (12:40 PM) Attachments:642

Welcome to futures.io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.


You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike
     

Reply
 642  
 
Thread Tools Search this Thread

Selling Options on Futures?

Old September 2nd, 2014, 10:55 PM   #3591 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,899 received
Forum Reputation: Legendary


daydayup8 View Post
I am not familiar the post style yet, my reply can't even be posted. "
The message you have entered is too short. Please lengthen your message to at least 1 characters."

Edit: IB is a great broker with a lot of good tools, I have been with them since 2008. The only reason I leave is because the margin issue with option selling.

Edit: I have about 10 books about option greeks and strategies and I read most of them, but they are all for option buying, Cordier's book is the first and only one about option selling. His book is by far the best:-)

I would highly recommend not being with IB for a new option seller.

#1 is the high margin requirements and the market exit margin calls. You don't need that hanging over your head as a new trader.

Do the basic selling techniques for a while before you move to the more advanced stuff. If ever. They are not needed to sell options.

Getting bang for the buck is important to the strategy and needs to be watched. You can't get any bang for the buck at IB.

Reply With Quote
     
The following 2 users say Thank You to ron99 for this post:
     

Old September 2nd, 2014, 10:57 PM   #3592 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,899 received
Forum Reputation: Legendary


CafeGrande View Post
I think the Cordier book is pretty good (it also doesn't have a lot of competition). If I recall,

(1) a lot of his examples brought in $300 to $700 per option in credit, so they were probably less than 20% out of the money and more than 20 delta.

This is totally wrong. I had an account with him. He never traded >20 delta. He went further out DTE to have premium and be far OTM.

Reply With Quote
     
The following user says Thank You to ron99 for this post:
     

Old September 3rd, 2014, 12:32 AM   #3593 (permalink)
Trading Apprentice
TPE, TW
 
Futures Experience: Beginner
Platform: ib tws
Favorite Futures: gbpusd, vix
 
Posts: 49 since Jul 2014
Thanks: 11 given, 40 received



datahogg View Post
A naked put with a delta of 0.25 is playing with fire. Also a weekly put with a delta of 0.25 is playing with a nuclear bomb. I monitor Ron99's exit point and also one used probably by lots of others. If I sell $400.00 of premium, and my losses reach $800.00 for this posiiton (independent of others), then I close the position. This is very easy to monitor. Wish you the best of luck.

If selling a weekly put with delta of 0.25 is a nuclear bomb then perhaps we should be BUYING those nuclear bombs to make explosive $$$ ? It's all in how the trader plays & manages them, don't put blame on the instruments.

Reply With Quote
     

Old September 3rd, 2014, 01:02 AM   #3594 (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
Thanks: 108 given, 171 received


k20a View Post
If selling a weekly put with delta of 0.25 is a nuclear bomb then perhaps we should be BUYING those nuclear bombs to make explosive $$$ ? It's all in how the trader plays & manages them, don't put blame on the instruments.

Right. Under the 'no free lunch' principle, if you had enough money and patience to keep buying those, over a long horizon, you should do as well as the seller.

That's part of Taleb's theory, although he/his former employees do it with well out of the money options. If I recall, he believes way OTM options are systematically under-priced so he expects to come out ahead.

Reply With Quote
     

Old September 3rd, 2014, 06:41 AM   #3595 (permalink)
Trading for Fun
Lancashire UK
 
Futures Experience: Intermediate
Platform: Tradestation, Interactive Brokers, OX
Favorite Futures: ES Z CL EURJPY
 
Posts: 52 since Jan 2013
Thanks: 42 given, 30 received

Futures Edge on FIO

Are you a NinjaTrader user?

 

kevinkdog View Post
FWIW, my ratio is 5.3 over approx 340 trades over the last year. I have no idea if this is good or bad.

I try to follow Ron's advice from here: https://futures.io/options-cfd-trading/12309-selling-options-futures-233.html#post366842


ron99 View Post
A ratio over 5:1 means your ROI is low. A 2:1 ratio means good ROI.

Mine's about 4.4 since June 2013.

Reply With Quote
     
The following user says Thank You to MGBRoadster for this post:
     

Old September 3rd, 2014, 10:03 AM   #3596 (permalink)
Elite Member
tennessee/USA
 
Futures Experience: Intermediate
Platform: Quotetracker, TOS
Broker/Data: OX TOS
Favorite Futures: ES
 
Posts: 83 since Aug 2014
Thanks: 267 given, 8 received

First Selling since Feb 2014

Plan to sell ES 1580 exp Dec 19, with delta=0.0307. Since I am very familiar with ES, start with ES first.
Any suggestions, Ron? other crew here? IB with IM=$2363, MM=$1890. I will start to use OX today, not sure the margin, I guess it will be much lower. Thanks.


Last edited by daydayup8; September 3rd, 2014 at 10:13 AM.
Reply With Quote
     

Old September 3rd, 2014, 10:12 AM   #3597 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,899 received
Forum Reputation: Legendary


daydayup8 View Post
Plan to sell ES 1580 exp Dec 19, with delta=0.0307. Since I am very familiar with ES, start with ES first.
Any suggestions, Ron? other crew here? IB with IM=$2353, MM=$18xx. I will start to use OX today, not sure the margin, I guess it will be much lower. Thanks.

Those are fine. IM is 782.

Reply With Quote
     
The following user says Thank You to ron99 for this post:
     

Old September 3rd, 2014, 10:13 AM   #3598 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,194 since Jul 2012
Thanks: 1,004 given, 3,965 received


daydayup8 View Post
Plan to sell ES 1580 exp Dec 19, with delta=0.0307. Since I am very familiar with ES, start with ES first.
Any suggestions, Ron? other crew here? IB with IM=$2353, MM=$18xx. I will start to use OX today, not sure the margin, I guess it will be much lower. Thanks.

With OX, margin will be $782. Your ROI, based on 3x margin requirement, will be 1.99%.

I counted 10 other potential options with a higher ROI, and a lower delta. 1560-1630 November expirations, ROI of 2.0% - 2.2%.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
     
The following 2 users say Thank You to kevinkdog for this post:
     

Old September 3rd, 2014, 10:50 AM   #3599 (permalink)
Elite Member
tennessee/USA
 
Futures Experience: Intermediate
Platform: Quotetracker, TOS
Broker/Data: OX TOS
Favorite Futures: ES
 
Posts: 83 since Aug 2014
Thanks: 267 given, 8 received

STO 2 @$2.00exp Nov 2014, not filled yet, what is that $1.14 other fees except commission? can that be waived Kevin?

Edit: any potential trading alerts, guys? I want to take a look, thanks :-)


kevinkdog View Post
With OX, margin will be $782. Your ROI, based on 3x margin requirement, will be 1.99%.

I counted 10 other potential options with a higher ROI, and a lower delta. 1560-1630 November expirations, ROI of 2.0% - 2.2%.



Last edited by daydayup8; September 3rd, 2014 at 11:07 AM.
Reply With Quote
     

Old September 3rd, 2014, 11:12 AM   #3600 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,194 since Jul 2012
Thanks: 1,004 given, 3,965 received



daydayup8 View Post
STO 2 @$2.00exp Nov 2014, not filled yet, what is that $1.14 other fees except commission? can that be waived Kevin?

Edit: any potential trading alerts, guys? I want to take a look, thanks :-)


I pay $4.07 per side per contract for ES options, commissions, exchange fee and NFA fee.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
     
The following 2 users say Thank You to kevinkdog for this post:
     

Reply



futures.io > Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

NinjaTrader 8: Features and Enhancements, Tips and Tricks

Dec 6
 

Al Brooks: Stop Losing when a Good Trade goes Bad, Correcting Mistakes

Elite only
 

Trading Technologies: Algo Design Lab hands-on

Dec 13
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Crude Oil (CL) futures inverse pairing options Big Mike Commodities Futures Trading 8 December 12th, 2013 12:00 PM
Recommend futures, options Broker? sam1197 Brokers and Data Feeds 17 March 27th, 2013 01:42 AM
Trading Futures with options as protection Gooffy2010 Commodities Futures Trading 6 October 2nd, 2012 05:55 PM
Selling Njniatrader sam1197 NinjaTrader 22 June 28th, 2012 01:40 PM
Zen-Fire Futures options tici88 Brokers and Data Feeds 1 July 30th, 2011 10:16 AM


All times are GMT -4. The time now is 03:51 PM.

Copyright © 2016 by futures.io. All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
 
no new posts

Page generated 2016-12-02 in 0.15 seconds with 20 queries on phoenix via your IP 54.146.141.60