NexusFi: Find Your Edge


Home Menu

 





Selling Options on Futures?


Discussion in Options

Updated
      Top Posters
    1. looks_one ron99 with 2,221 posts (4,489 thanks)
    2. looks_two SMCJB with 346 posts (733 thanks)
    3. looks_3 kevinkdog with 341 posts (400 thanks)
    4. looks_4 myrrdin with 288 posts (408 thanks)
      Best Posters
    1. looks_one SMCJB with 2.1 thanks per post
    2. looks_two ron99 with 2 thanks per post
    3. looks_3 myrrdin with 1.4 thanks per post
    4. looks_4 kevinkdog with 1.2 thanks per post
    1. trending_up 1,949,926 views
    2. thumb_up 9,259 thanks given
    3. group 458 followers
    1. forum 7,370 posts
    2. attach_file 794 attachments




 
Search this Thread

Selling Options on Futures?

  #3671 (permalink)
CafeGrande
St Paul, MN, USA
 
Posts: 200 since Jan 2014
Thanks Given: 131
Thanks Received: 207


hummingbird View Post
That's good advice, thank you. I mostly scalp the Emini S&P 500 but would like swing trade other instruments on hourly and daily time frames using options to limit my risk. I have never traded with options and don't know much about them, so I thought I would stop by this forum and ask a few questions.

If you're trading in a taxable account, section 1256 status for regulated, exchange-traded futures and futures options can be a big time saver (accounting) and tax-saver.

Reply With Quote

Can you help answer these questions
from other members on NexusFi?
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
Deepmoney LLM
Elite Quantitative GenAI/LLM
Better Renko Gaps
The Elite Circle
ZombieSqueeze
Platforms and Indicators
NexusFi Journal Challenge - April 2024
Feedback and Announcements
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
61 thanks
Funded Trader platforms
39 thanks
NexusFi site changelog and issues/problem reporting
26 thanks
GFIs1 1 DAX trade per day journal
18 thanks
The Program
18 thanks
  #3672 (permalink)
hummingbird
Yreka, CA United States
 
Posts: 11 since Sep 2014
Thanks Given: 0
Thanks Received: 2

Thanks for the heads up on that 1256. I found a good article explaining more of the details and book marked it.

Reply With Quote
  #3673 (permalink)
dbh21
San Diego, CA
 
Posts: 23 since Nov 2012
Thanks Given: 14
Thanks Received: 1


Ron, et al.

I'm wondering if you can double-check my understanding of this thread. Looking at the SPAN data published today and CL, I see really good ROI for CLX4 trades (23 DTE). For example at 0.03 for the 79 Puts would be a 5.8% return (7.6% monthly) and the 105 Calls would be a 5% ROI (6.5% monthly). These are -2.5 and 1.5 deltas according to TOS.

I thought maybe 23 DTE was too close to enter a trade (being new to this). I can open trades in CLZ4 but the monthly returns I see are about half what they are for CLX4 (~3-3.75%). But clearly, the are much further OOM.

Would you advocate choosing something like the CLZ4 70 Put over the CLX4 79?

I don't have a feel for how CL can move in 23 days yet, but even though the 79 has a 2.5delta, its only 12 points away. I'm guessing CL could move that fast.

Thanks
(Still only 40% through this enormous thread .

Reply With Quote
  #3674 (permalink)
MGBRoadster
Lancashire UK
 
Posts: 52 since Jan 2013
Thanks Given: 42
Thanks Received: 32


dbh21 View Post
Ron, et al.

I'm wondering if you can double-check my understanding of this thread. Looking at the SPAN data published today and CL, I see really good ROI for CLX4 trades (23 DTE). For example at 0.03 for the 79 Puts would be a 5.8% return (7.6% monthly) and the 105 Calls would be a 5% ROI (6.5% monthly). These are -2.5 and 1.5 deltas according to TOS.

I thought maybe 23 DTE was too close to enter a trade (being new to this). I can open trades in CLZ4 but the monthly returns I see are about half what they are for CLX4 (~3-3.75%). But clearly, the are much further OOM.

Would you advocate choosing something like the CLZ4 70 Put over the CLX4 79?

I don't have a feel for how CL can move in 23 days yet, but even though the 79 has a 2.5delta, its only 12 points away. I'm guessing CL could move that fast.

Thanks
(Still only 40% through this enormous thread .

Well done for getting 40% through the thread - the size of it must put most people off completely.

Your ROIs look fairly close to mine. If you go to the PC-SPAN thread you'll find Dudetooth's magnificent spreadsheet that calculates ROIs for you, in addition to many other things.

Further on in this thread Ron99 has a rule of thumb for CL - he has a minimum distance of 20 points for Puts and 25 points for Calls. Also, if you move further out in time you can significantly improve your ROI if you buy back your options when the majority of the premium has been earned.

So the bad news is I guess you've got some more reading to do

HTH

Chris

Reply With Quote
Thanked by:
  #3675 (permalink)
dbh21
San Diego, CA
 
Posts: 23 since Nov 2012
Thanks Given: 14
Thanks Received: 1

Thanks Chris.

I've been using Dudetooth's excel sheet. Frankly its the finest VB programming I've seen (VB is very icky).

I'm still reading, but I read 15-20 points for CL on the puts. Also, he'd never touch anything > 75 or less than 120.


Quoting 
Also, if you move further out in time you can significantly improve your ROI if you buy back your options when the majority of the premium has been earned.

I get this concept, but how far out are you talking? The 70Puts 55 days out are 0.03, and the 70 Puts 84 days out are 0.08. So assuming the market is relatively stable, there should be roughly 0.05 of profit within ~30 days of selling the puts 84 days out. Does that sound correct?

Reply With Quote
  #3676 (permalink)
 daydayup8 
tennessee/USA
 
Experience: Intermediate
Platform: Quotetracker, TOS
Broker: OX TOS
Trading: ES
Posts: 83 since Aug 2014
Thanks Given: 267
Thanks Received: 8

I can't even place the trade at OX if there is no open interest at a strike, then who is the first one at each strike to open a trade? wondering...

I plan to STO CLF5 68p and CLF5118C, but I can't place both at OX.

Reply With Quote
  #3677 (permalink)
 kevinkdog   is a Vendor
 
Posts: 3,645 since Jul 2012
Thanks Given: 1,890
Thanks Received: 7,338


daydayup8 View Post
I can't even place the trade at OX if there is no open interest at a strike, then who is the first one at each strike to open a trade? wondering...

I plan to STO CLF5 68p and CLF5118C, but I can't place both at OX.

Someone at a brokerage that allows trading 0 interest strikes...

Follow me on Twitter Reply With Quote
  #3678 (permalink)
 daydayup8 
tennessee/USA
 
Experience: Intermediate
Platform: Quotetracker, TOS
Broker: OX TOS
Trading: ES
Posts: 83 since Aug 2014
Thanks Given: 267
Thanks Received: 8


kevinkdog View Post
Someone at a brokerage that allows trading 0 interest strikes...

I remember RON once said in this thread he sometimes is the first one to open a trade. i maybe wrong, just have this impression.

Reply With Quote
  #3679 (permalink)
 kevinkdog   is a Vendor
 
Posts: 3,645 since Jul 2012
Thanks Given: 1,890
Thanks Received: 7,338


daydayup8 View Post
I remember RON once said in this thread he sometimes is the first one to open a trade. i maybe wrong, just have this impression.

He doesn't use OX.

Follow me on Twitter Reply With Quote
  #3680 (permalink)
 daydayup8 
tennessee/USA
 
Experience: Intermediate
Platform: Quotetracker, TOS
Broker: OX TOS
Trading: ES
Posts: 83 since Aug 2014
Thanks Given: 267
Thanks Received: 8



kevinkdog View Post
He doesn't use OX.

I know he has DeCarley, does that mean some brokerages have advantages over other brokers?

Reply With Quote




Last Updated on July 28, 2023


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
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.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts