Selling Options on Futures? (Page 370) - 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:569,025 / 5,728
Last Reply:22 Hours Ago (05:26 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 25th, 2014, 06:37 PM   #3691 (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

Thanks, SMCJB

You're on top of these things so it's good to know I haven't missed a big event other than the coming winter and the storage scenario game, which, of course, is THE event.

With respect to March 2015, I was a little surprised that ATM IV was up to 38-39% and the skew was so steep (favoring calls) already, but I suppose there are still a lot of fresh and perhaps painful memories from just 7 months ago.


Last edited by CafeGrande; September 25th, 2014 at 06:43 PM.
Reply With Quote
     

Old September 25th, 2014, 08:26 PM   #3692 (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
Thanks, SMCJB

You're on top of these things so it's good to know I haven't missed a big event other than the coming winter and the storage scenario game, which, of course, is THE event.

With respect to March 2015, I was a little surprised that ATM IV was up to 38-39% and the skew was so steep (favoring calls) already, but I suppose there are still a lot of fresh and perhaps painful memories from just 7 months ago.

I'll ask around tomorrow, see if I hear anything interesting.
Do you have any way to check back prior to last year? Just wondering if maybe last year was the anomoly rather than this year.

The more I look at this chart though, the more I think it tells an amazing story.
i) The magnitude of the withdrawals last year (Dec-Mar)
ii) How low storage got below the 5 year range
iii) How quickly we have refilled it this year.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

(actual graphic rather than link as I just realized this graphic changes every week and in a years time will be meaningless to anybody reading this thread!)

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

Old September 25th, 2014, 09:21 PM   #3693 (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


Here's a cheap and dirty comparison from CRB/Barchart for the March 2009 - 2015 contracts.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


Last year was exceptionally flat and, at a glance, it looks like the move this year is ~two months early;
starting in early Aug rather than early Oct (or later)

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

Old September 26th, 2014, 01:23 PM   #3694 (permalink)
Trading Apprentice
San Diego, CA
 
Futures Experience: Intermediate
Platform: tos
Favorite Futures: Options
 
Posts: 23 since Nov 2012
Thanks: 14 given, 1 received

I just finished reading the thread.

I've been an equities option trader for several years. While this market sucks for option traders, I still find myself drawn to ever more conservative positions, and ones that I don't have to monitor full time. I immediately see the appeal of this type of trading and only wish I found you guys sooner.

I like the idea of diversifying over a handful of different uncorrelated futures. I currently have ES and CL. My understanding is NG is correlated to CL (and NG calls scare the crap out of me). I need to learn more about grains before I trade, but I am thinking of adding a grain, /ZB, /CD (assuming good ROI). Do you think something like this adds nice diversification or are there other futures I should also pay attention to?

Also, I'm seeing really good returns on /HE. Like the HEV4 87 Put shows an 21% ROI. I'm not going to trade it, but what am I missing? is there a big chance of a crash here?

Reply With Quote
     

Old September 26th, 2014, 01:28 PM   #3695 (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

Futures Edge on FIO

CafeGrande View Post
Last year was exceptionally flat and, at a glance, it looks like the move this year is ~two months early;
starting in early Aug rather than early Oct (or later)

One of the reason last year looks so flat on those charts is because the vertical access has a scale of 3x-5x the other charts.

Reply With Quote
     

Old September 26th, 2014, 01:38 PM   #3696 (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


dbh21 View Post
My understanding is NG is correlated to CL

Pre the abundance of shale gas they were correlated but I think you will find that correlation as abated in the last decade.

dbh21 View Post
(and NG calls scare the crap out of me).

You can obviously hear the famous Natural Gas Drums of Fear!

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

Old September 26th, 2014, 03:33 PM   #3697 (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


SMCJB View Post
One of the reason last year looks so flat on those charts is because the vertical access has a scale of 3x-5x the other charts.

That's true. For the viewing audience, here is an expanded version. Still pretty flat, though, with an IV of roughly 28-30% from July 1 to the end of September.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Reply With Quote
     

Old September 29th, 2014, 01:29 PM   #3698 (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

SPAN

I sold to open three ES put positions when it was around 1996 at early September (bad timing, but since timing it not that important for DOTM option selling, I sold them anyway). Market first ranged, now trended down for about 30 points, I have some loss in premium and margin increased since last week. I keep checking in OX with my three ES positions and I have a question regarding SPAN margin.

SPAN is not updated consistently through the day per my understanding, only updated at the end of the day and we can see the SPAN margin next day morning. So, my question is how can we know the 'exact' time to exit a position if market go against us? we can only guess, right? for example, ES is down again today, I can use the 'trade and probability calculator' from OX to check my premium, IM, delta etc, but I can't calculate the exact point to exit my position since I can only get the new IM tomorrow morning, the premium is changing through the day, but the IM is not. Of course, I learn to exit when the new premium+new IM-old premium>=3*old IM (thanks to Ron), but in this equation, there is one factor I don't know now, the new IM, which I have to wait till tomorrow morning. So, my question is: what if it is a market crash? should we still wait until tomorrow to decide to exit after seeing the new updated IM? or is guessing the risk involved here?

Thanks for your inputs or your thoughts, or let me know if I miss something.


-Jenny

Reply With Quote
     

Old September 29th, 2014, 06:07 PM   #3699 (permalink)
Elite Member
Steubenville Ohio
 
Futures Experience: Intermediate
Platform: OX, OEC, RJO
Favorite Futures: Options on Futures
 
Posts: 179 since Sep 2012
Thanks: 24 given, 198 received


daydayup8 View Post
So, my question is: what if it is a market crash? should we still wait until tomorrow to decide to exit after seeing the new updated IM? or is guessing the risk involved here?

-Jenny

Jenny,

Most folks don't try to calculate their exit margin on an intraday basis ... they wait for the close. If the closing price/margin is to the point that they need to exit they do so the next trading day, or put in orders that night.

SPAN is updated by CME around 10:30am, 12pm, 4pm and the settlement SPAN usually comes out around 7pm. Most brokerages, like OX, will use the most recent SPAN when they give you your margin requirements on the webpage, though it could be a little delayed. You should be able to see what your margin looks like tonight to help you make your decision.

Hope this helps.

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

Old September 29th, 2014, 07:00 PM   #3700 (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



Dudetooth View Post
Jenny,

Most folks don't try to calculate their exit margin on an intraday basis ... they wait for the close. If the closing price/margin is to the point that they need to exit they do so the next trading day, or put in orders that night.

SPAN is updated by CME around 10:30am, 12pm, 4pm and the settlement SPAN usually comes out around 7pm. Most brokerages, like OX, will use the most recent SPAN when they give you your margin requirements on the webpage, though it could be a little delayed. You should be able to see what your margin looks like tonight to help you make your decision.

Hope this helps.

Thank you very much, your inputs are really appreciated. I have finished reading this thread, but it seemed that I still missed some important information and you certainly helped with that.

Happy trading!


--Jenny

Reply With Quote
     

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 04:15 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 2016-12-07 in 0.49 seconds with 20 queries on phoenix via your IP 50.16.52.237