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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,479 / 5,734
Last Reply:4 Hours Ago (01:01 AM) Attachments:642

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Selling Options on Futures?

Old September 17th, 2014, 05:33 PM   #3631 (permalink)
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if I buy it at 0.01, IM=$50? DTE=47? (not familiar with DA, its expiration is 11/04/2014?)
the ROI will be (20/150)/47*30=8.5% before commission. Is this correct? Can someone having the SPAN margin confirm with me? it looks good. Thanks.



mu2pilot View Post
I sold these at $0.03 on 9/10. I'm buying them back today at $0.01 for a 7-day 2.8% ROI. That's 145% annual ROI. Good stuff. Thanks Ron!!


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Old September 17th, 2014, 05:40 PM   #3632 (permalink)
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daydayup8 View Post
if I buy it at 0.01, IM=$50? DTE=47? (not familiar with DA, its expiration is 11/04/2014?)
the ROI will be (20/150)/47*30=8.5% before commission. Is this correct? Can someone having the SPAN margin confirm with me? it looks good. Thanks.

You need to subtract the commissions and fees. It makes a big difference when the premium is only $20.

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Old September 17th, 2014, 05:48 PM   #3633 (permalink)
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is the IM $50 correct? DTE 47?
ROI: (20-4.5)/150/47*30=6.5%, still good, am I missing something?


ron99 View Post
You need to subtract the commissions and fees. It makes a big difference when the premium is only $20.


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Old September 17th, 2014, 05:55 PM   #3634 (permalink)
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daydayup8 View Post
is the IM $50 correct? DTE 47?
ROI: (20-4.5)/150/47*30=6.5%, still good, am I missing something?

The IM is $74 today.

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Old September 17th, 2014, 06:00 PM   #3635 (permalink)
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Futures Edge on FIO

Are you a NinjaTrader user?

 
IM when I put the trade on was $389.40.

Here is the math:

I sold 40 options @ $0.03. My gross premium received was $2400.00. Commissions and fees on the opening sale was $256.40, for a net premium received of $2143.60. I paid $0.01 to buy the options back or a gross cost of 40 x .01 x 2000 or $800 plus fees. Fees were $1.41 per option or $56.40, so I paid $856.40 to buy the options back. My net profit was $2143.6 - $856.40 or $1287.20.

Since IM was $389.40, I risked or set aside $46,728 (3x IM X 40) in my acct for this trade. That is a raw ROI of 2.75% (my ROI was slightly higher because I got a small rebate on some of the fees). I held the trade for 7 days. The monthly ROI would then be 2.75/7*30 or 11.81% per month or 141.67 annual.

Hope this helps.

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Old September 17th, 2014, 06:17 PM   #3636 (permalink)
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Thanks to Kevinkdog's link, I open my acct with OX with 50 free trades.
I really want to buy 3 of them at 0.01, so my ROI will be (20/222)/49*30=5.5%, I plan to hold them till expiration, what do you think, RON? I haven't tried other selling yet except ES. Thanks.

ron99 View Post
The IM is $74 today.


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Old September 17th, 2014, 06:21 PM   #3637 (permalink)
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mu2pilot View Post
IM when I put the trade on was $389.40.

Here is the math:

I sold 40 options @ $0.03. My gross premium received was $2400.00. Commissions and fees on the opening sale was $256.40, for a net premium received of $2143.60. I paid $0.01 to buy the options back or a gross cost of 40 x .01 x 2000 or $800 plus fees. Fees were $1.41 per option or $56.40, so I paid $856.40 to buy the options back. My net profit was $2143.6 - $856.40 or $1287.20.

Since IM was $389.40, I risked or set aside $46,728 (3x IM X 40) in my acct for this trade. That is a raw ROI of 2.75% (my ROI was slightly higher because I got a small rebate on some of the fees). I held the trade for 7 days. The monthly ROI would then be 2.75/7*30 or 11.81% per month or 141.67 annual.

Hope this helps.

this is excellent, and congradulations on your successful trade

to earn that I can almost guarantee more excitement in the Emini pits..

what really concerns me, are the required necessary funds on account (margin) based on the increased SEC Reg-T margin on option trades, particularly naked options too...

what about $35,000?

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Old September 17th, 2014, 06:23 PM   #3638 (permalink)
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daydayup8 View Post
Thanks to Kevinkdog's link, I open my acct with OX with 50 free trades.
I really want to buy 3 of them at 0.01, so my ROI will be (20/222)/49*30=5.5%, I plan to hold them till expiration, what do you think, RON? I haven't tried other selling yet except ES. Thanks.

You will not make that buying options. Only selling the option.

I doubt you will find a buyer at 0.01 since it settled today at 0.005.

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Old September 17th, 2014, 06:26 PM   #3639 (permalink)
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Ron typically doesn't sell options with a value < $30. But if you do this trade, your ROI will be more like 3.7%:

$20-6.50 commission/fees / 222 / 49 * 30

I guess if you have 50 free trades coming then your ROI will be 5.1%:

$20-1.50 exchange fees / 222 / 49 * 30

Not too bad, but you will have to hold it for its duration to "collect" the full return.

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Old September 17th, 2014, 06:27 PM   #3640 (permalink)
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kronie View Post
this is excellent, and congradulations on your successful trade

to earn that I can almost guarantee more excitement in the Emini pits..

what really concerns me, are the required necessary funds on account (margin) based on the increased SEC Reg-T margin on option trades, particularly naked options too...

what about $35,000?

The SEC does not regulate option on futures trading.

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