Selling Options on Futures? (Page 369) - 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:569,356 / 5,729
Last Reply:A moment ago (11:47 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 24th, 2014, 03:59 PM   #3681 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,195 since Jul 2012
Thanks: 1,004 given, 3,969 received


daydayup8 View Post
I know he has DeCarley, does that mean some brokerages have advantages over other brokers?

They have different rules they adhere to, but that doesn't mean it is an advantage for one broker or not.

You can always call in the order to OX, and I think they allow you to trade 0 interest then.

Question for you: why not just find a comparable option that has open interest, and then trade that?

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 user says Thank You to kevinkdog for this post:
     

Old September 24th, 2014, 04:12 PM   #3682 (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


kevinkdog View Post
They have different rules they adhere to, but that doesn't mean it is an advantage for one broker or not.

You can always call in the order to OX, and I think they allow you to trade 0 interest then.

Question for you: why not just find a comparable option that has open interest, and then trade that?

CLF5 65P, bid 0.02, ask 0.04, 70P bid 0.04, ask 0.08.
Right now, CLF5 is about 91.7, I want to 24, 25 OTM of the price to be safe, so, 70P feels a little risky, 65P feels too little meat.
I have watched CL for quite some time, I got my first trade yesterday at 0.01 CLZ4 65P (most of you don't even consider or maybe take profit at that price:-). I am trying to get the second trade. I always feel CL or NG risky, so I want to be as much as OTM possible.

Reply With Quote
     

Old September 24th, 2014, 04:34 PM   #3683 (permalink)
Trading Apprentice
San Diego, CA
 
Futures Experience: Intermediate
Platform: tos
Favorite Futures: Options
 
Posts: 23 since Nov 2012
Thanks: 14 given, 1 received



dbh21 View Post
That helps. My understanding of SPAN is it tests 16 different combinations of price and vol movement to come up with the value. In that case while it is not the max of one side, it is not the sum either.

But I am still confused by
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


So this says the Min risk is 660, and the Buying Power effect 780. Given these are no where near 229 and 400, it looks like they are adding them. I'm going to have to ask them to clarify. Just want to make sure I am not asking dumb questions.

I finally heard back from TOS (customer support is very lacking). Apparently they have a SOM (Short Option Minimum) of 330 per option. I think this is far in excess of the SPAN minimum, and it ends up overriding the SPAN calculation. The net effect is there is no benefit to trading FOTM strangles at TOS from what I can tell. Bah

Reply With Quote
     

Old September 24th, 2014, 04:44 PM   #3684 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,195 since Jul 2012
Thanks: 1,004 given, 3,969 received


daydayup8 View Post
CLF5 65P, bid 0.02, ask 0.04, 70P bid 0.04, ask 0.08.
Right now, CLF5 is about 91.7, I want to 24, 25 OTM of the price to be safe, so, 70P feels a little risky, 65P feels too little meat.
I have watched CL for quite some time, I got my first trade yesterday at 0.01 CLZ4 65P (most of you don't even consider or maybe take profit at that price:-). I am trying to get the second trade. I always feel CL or NG risky, so I want to be as much as OTM possible.

What is your net profit going to be on those CLZ4 65P? $5? Is that really worth the unlimited risk involved? Your ROI may be over 2%, but you'd have to sell a bunch (20!!!) to make $100. 20 contracts gets unwieldy really fast if prices go against you...

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread

Last edited by kevinkdog; September 24th, 2014 at 05:10 PM.
Reply With Quote
     
The following 3 users say Thank You to kevinkdog for this post:
     

Old September 24th, 2014, 05:16 PM   #3685 (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

Futures Edge on FIO

Are you a NinjaTrader user?

 

kevinkdog View Post
What is your net profit going to be on those CLZ4 65P? $5? Is that really worth the unlimited risk involved? Your ROI may be over 2%, but you'd have to sell a bunch (20!!!) to make $100. 20 contracts gets unwieldy really fast if prices go against you...



I sold 4 @0.01, IM total 145.2, excess 290.4, delta 0.00, DTE 55, ROI about 5% (still getting free trades in OX). You are right, I will be more cautious, just could not find the right strike. I am still in the testing mode. What CL position you have now if you don't mind?

Reply With Quote
     

Old September 24th, 2014, 05:45 PM   #3686 (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

Just look at CLF5 70P, it had price 0.12 yesterday, 0.07 today, I wish I had sold that strike with the same timing I sold the CLZ465p.
just couldn't do that as I think 70P is too risky.

Reply With Quote
     

Old September 24th, 2014, 08:23 PM   #3687 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,195 since Jul 2012
Thanks: 1,004 given, 3,969 received


daydayup8 View Post
I sold 4 @0.01, IM total 145.2, excess 290.4, delta 0.00, DTE 55, ROI about 5% (still getting free trades in OX). You are right, I will be more cautious, just could not find the right strike. I am still in the testing mode. What CL position you have now if you don't mind?

I have some Dec 72 and 74, and some Nov 80s. I put most of those on a while ago, though.

Kevin

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 user says Thank You to kevinkdog for this post:
     

Old September 25th, 2014, 01:16 AM   #3688 (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

What's gotten into natural gas?

The implied volatility has been on a steady march higher and it's accelerated recently. Pretty dramatic, even in the forward months (March shown). Seems odd ... shoulder season, fairly tight trading range for the last two months, building stocks back up at a healthy clip, no hurricanes and so on. Last year the same time period saw IV flat as a board until right after Thanksgiving. Any ideas? I know the storage report is in the a.m. but IV has moved higher right through those for the last couple of weeks.

Attached Thumbnails
Selling Options on Futures?-gas-natural.png  
Reply With Quote
     

Old September 25th, 2014, 05:11 AM   #3689 (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


dbh21 View Post
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.



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?

Yes that sounds about right. I've had good trades with entries around 0.07/0.08 and exiting at 0.02/0.03.

I've read somewhere one rule of thumb is to exit when 2/3rds of the premium has been gained.

Ron discusses this topic with regards ES from post # 3130 https://futures.io/options-cfd-trading/12309-selling-options-futures-313.html#post398928


Chris

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

Old September 25th, 2014, 06:10 PM   #3690 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,586 since Dec 2013
Thanks: 1,395 given, 2,362 received
Forum Reputation: Legendary



CafeGrande View Post
The implied volatility has been on a steady march higher and it's accelerated recently. Pretty dramatic, even in the forward months (March shown). Seems odd ... shoulder season, fairly tight trading range for the last two months, building stocks back up at a healthy clip, no hurricanes and so on. Last year the same time period saw IV flat as a board until right after Thanksgiving. Any ideas? I know the storage report is in the a.m. but IV has moved higher right through those for the last couple of weeks.

Summer is over, Winter approaches, time to start banging the drums of fear...

More seriously it is true we have been "building stocks back up at a healthy clip" in fact I believe we have injected more gas this injection season than any other on record. The fact still remains though that stocks are currently 11% below last years stock level and 12% below the 5 year average. ICE's end of season storage futures are currently 3515/3540 which would imply that at the end of the injection season we will still be 8% below last years stock levels. If we go into winter 8% below last year, and then get another winter the same as last year ....

Weekly Natural Gas Storage Report - EIA
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Reply With Quote
     
The following 3 users say Thank You to SMCJB 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)
 

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

Elite only
 

Trading Technologies: ADL hands-on

Dec 13

Normal webinar schedule resumes after the holidays

January

Ernie Chan: Risk Management

Elite only

Dedicated Trading Servers: Advantages/Disadvantages w/sam028

Elite only

An Afternoon with FIO member Massive I

Elite only

Leo Murphy: TBA

Elite only
     

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 11:48 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 2016-12-08 in 0.18 seconds with 20 queries on phoenix via your IP 54.197.66.254