Selling Options on Futures? (Page 371) - 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:568,134 / 5,727
Last Reply:December 2nd, 2016 (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 29th, 2014, 09:22 PM   #3701 (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


Dudetooth View Post
Jenny,

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.

That's interesting. I knew FCMs could increase margins whenever they felt like it, but I thought that was based solely on their own risk models (SPAN+ for lack of a better term). I did not know the exchanges had two or three intra-day official updates.

In my experience, even the larger FCMs vary quite a bit in the level of detail they provide for intra-day and end of day margins; I suspect if someone has an account with a small/less technologically sophisticated FCM, they might only have access to end of day net margin by product (not by contract).

Reply With Quote
     

Old September 30th, 2014, 01:07 PM   #3702 (permalink)
Trading Apprentice
San Diego, CA
 
Futures Experience: Intermediate
Platform: tos
Favorite Futures: Options
 
Posts: 23 since Nov 2012
Thanks: 14 given, 1 received

CL is down +3% today. I'm trying to understand why, but I'm not seeing much from my normal newsfeeds (yahoo, marketwatch, google news, tos). Can't be because its the last day of the month can it? Where is a good source for real-time news on commodities?

Seems like a good time to enter a trade as vol should be up (but I might be naive)

Thanks

Reply With Quote
     

Old September 30th, 2014, 02:05 PM   #3703 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,580 since Dec 2013
Thanks: 1,392 given, 2,352 received
Forum Reputation: Legendary



CafeGrande View Post
That's interesting. I knew FCMs could increase margins whenever they felt like it, but I thought that was based solely on their own risk models (SPAN+ for lack of a better term). I did not know the exchanges had two or three intra-day official updates.

Couple of points here...
Normally the exchanges will advise of margin increases a day (or more) in advance, so you know it's happening. But in times of high volatility they can and do not only increase them intra-day but also increase them several times as @Dudetooth mentions. I'm not sure what the exact rules are on this but I believe the exchanges can (and do) force clearing firms to post more margin intraday. I assume that clearers can in turn pass that on to clients but do not know whether/how often that happens.

CafeGrande View Post
In my experience, even the larger FCMs vary quite a bit in the level of detail they provide for intra-day and end of day margins; I suspect if someone has an account with a small/less technologically sophisticated FCM, they might only have access to end of day net margin by product (not by contract).

Not only do intra-day limits vary by clearer but at many clearers they vary by client as well. A proven successful trader will probably be given high intra-day limits than a newer trader.

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

Old September 30th, 2014, 02:20 PM   #3704 (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


dbh21 View Post
CL is down +3% today. I'm trying to understand why, but I'm not seeing much from my normal newsfeeds (yahoo, marketwatch, google news, tos). Can't be because its the last day of the month can it? Where is a good source for real-time news on commodities?

Seems like a good time to enter a trade as vol should be up (but I might be naive)

Thanks

Sell-off like this is scary, I looked at the chart for the past three years and found it not unusual. Just need to put more for margin.

Reply With Quote
     

Old October 1st, 2014, 07:30 PM   #3705 (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, 3,902 received
Forum Reputation: Legendary

Futures Edge on FIO

Are you a NinjaTrader user?

 
Back in Sep 2011 Gold futures dropped over 200 in 3 days. Painful for many option sellers including me.

Well now we know why. A large spec unloaded positions equal to 10% of the market!


Quoting 
Shak briefly won fame in early 2011 when SHK liquidated a gold trade spread trade - with a notional value of some $850 million - that caused tremors in the gold market. Open interest in U.S. gold futures fell by the most on record as he closed out positions equivalent to a 10th of the market.

No bluff: Lifetime ban sought against poker player

EDIT. This was the 1/24/11 trade not Sep 2011. OI for all GC futures contracts dropped 81,752 in one day. 14%. Surprisingly futures were up 3.50 that day.

Somebody else screwed us in Sep 2011.


Last edited by ron99; October 1st, 2014 at 07:44 PM.
Reply With Quote
     
The following user says Thank You to ron99 for this post:
     

Old October 1st, 2014, 08:15 PM   #3706 (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


ron99 View Post

Somebody else screwed us in Sep 2011.

Probably some combination of Greece, Super Mario & the Angelas, and the U.S. Congress, i.e. the US debt ceiling, the European debt bomb and the subsequent volatility and broad sell-offs in many markets in Aug and Sep 2011.

From memory, I sold some crude oil options at about 50% IV and some silver options at about 85% IV in October 2011. We haven't been anywhere close to those IV levels since.

Reply With Quote
     

Old October 4th, 2014, 05:18 PM   #3707 (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

FWIW, in a number of physical commodities, you are now getting paid more for selling options:

Crude Oil, Nat Gas, Silver, Coffee, Cocoa and Lean Hog options (30-90 day options) all have implied volatilities in the 80th to 100th percentile using a 12-month look-back.

Sugar is also up a bit recently but only getting back to the 50th percentile. Corn, wheat, soybeans and soymeal are mostly less than the 50th percentile and likely heading into (continuing?) a period of relative slumber.

Reply With Quote
     

Old October 4th, 2014, 05:29 PM   #3708 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 257 since Oct 2012
Thanks: 126 given, 75 received


CafeGrande View Post
FWIW, in a number of physical commodities, you are now getting paid more for selling options:

Crude Oil, Nat Gas, Silver, Coffee, Cocoa and Lean Hog options (30-90 day options) all have implied volatilities in the 80th to 100th percentile using a 12-month look-back.

Sugar is also up a bit recently but only getting back to the 50th percentile. Corn, wheat, soybeans and soymeal are mostly less than the 50th percentile and likely heading into (continuing?) a period of relative slumber.

Yes I noticed, and last Thursday (10/02/14) for better or worse, I sold some CL CLF5/LOF5 64 P @ $60.00. DELTA=0.01
EXP-12/17.

Reply With Quote
     

Old October 4th, 2014, 05:41 PM   #3709 (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


datahogg View Post
Yes I noticed, and last Thursday (10/02/14) for better or worse, I sold some CL CLF5/LOF5 64 P @ $60.00. DELTA=0.01
EXP-12/17.


I think you're safe with $60. If we get near there we'll probably have bigger problems like a big recession and a plunging stock market.

But this has been a good reminder that crude, after a long period at plus or minus $100, can drop $10 fairly quickly. Anyone that sold a $75 or $80 put during the calm period when ATM IV was 15-17% (now it's 22% and a five delta put is 28%) is feeling some pain over the last week.

Reply With Quote
     

Old October 4th, 2014, 06:09 PM   #3710 (permalink)
Trading Apprentice
San Diego, CA
 
Futures Experience: Intermediate
Platform: tos
Favorite Futures: Options
 
Posts: 23 since Nov 2012
Thanks: 14 given, 1 received



CafeGrande View Post
I think you're safe with $60. If we get near there we'll probably have bigger problems like a big recession and a plunging stock market.

But this has been a good reminder that crude, after a long period at plus or minus $100, can drop $10 fairly quickly. Anyone that sold a $75 or $80 put during the calm period when ATM IV was 15-17% (now it's 22% and a five delta put is 28%) is feeling some pain over the last week.

This is my first time with CL, but I have CLX4 84s (very very small position), CLZ4 72 and 74s, and CLF5 70s that I put on before the drop in CL and the rise in vol. I noticed that the CLF5 70's were the hardest hit. I thought they were supposed to be more resilient, but maybe I put them on too cheaply (I sold for 0.08 and they are worth 0.2 now... might load up on some more).

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 04:08 AM.

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 2016-12-04 in 0.15 seconds with 20 queries on phoenix via your IP 54.211.82.105