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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,022 / 5,727
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Selling Options on Futures?

Old November 4th, 2014, 05:34 PM   #3781 (permalink)
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daydayup8 View Post
Did you mean sell NG calls? I thought NG would go higher from the previous reports and charts, I maybe wrong, I am very new in NG, just noticed it went higher at the end of last year and early this year.

I was joking.

CafeGrande posted the image below which implies a 2 Std Dev move in NGH would be $7. I was making the joke that people could safely sell the $7 call. In reality I'm one of the last people that would recommend that a non very experience NG trader short NGH calls. A lot of money made and lost here last year on March NG Calls - some interesting reads if you have time.

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Old November 4th, 2014, 07:01 PM   #3782 (permalink)
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I read the whole threat. Thanks. It looks like NG starts the up-trend again.

SMCJB View Post
I was joking.

CafeGrande posted the image below which implies a 2 Std Dev move in NGH would be $7. I was making the joke that people could safely sell the $7 call. In reality I'm one of the last people that would recommend that a non very experience NG trader short NGH calls. A lot of money made and lost here last year on March NG Calls - some interesting reads if you have time.

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Old November 4th, 2014, 07:24 PM   #3783 (permalink)
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daydayup8 View Post
It looks like NG starts the up-trend again.

Forecasts all shifting colder... Dec Futures have rallied 50+c in the last 6 days.
If you think that's significant - physical gas for the balance of the month delivered to Algonquin (aka Boston) - the most expensive and volatile gas in the country - was up $1.70 today to $8.30!

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Old November 4th, 2014, 07:41 PM   #3784 (permalink)
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SMCJB View Post
I was joking.

CafeGrande posted the image below which implies a 2 Std Dev move in NGH would be $7. I was making the joke that people could safely sell the $7 call. In reality I'm one of the last people that would recommend that a non very experience NG trader short NGH calls. A lot of money made and lost here last year on March NG Calls - some interesting reads if you have time.

And I was kidding about adding a side order of (short) soybean meal calls, which have also increased significantly in price and in implied volatility recently. The plane ticket reference is from an old trading joke - the "O'Hare Hedge" - where you put on trades you can't afford and then buy a ticket to Rio or someplace that doesn't have an extradition treaty with the US.

If the trade goes your way, you have a great vacation and come back a hero. If it doesn't, you're broke and can never return home, but at least you can live out your days in a tropical country.

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Old November 4th, 2014, 09:29 PM   #3785 (permalink)
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SMCJB View Post
Forecasts all shifting colder...

This is an interesting piece from the Washington Post about how Typhoon Nuri and the Arctic Oscillation look to be about to bring an early blast of cold to the US.

Typhoon Nuri forecast to kick-start a parade of cold outbreaks in Eastern U.S. - The Washington Post

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Old November 5th, 2014, 06:58 AM   #3786 (permalink)
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For anyone that missed SMCJB's post from last December about March/April NG it's worthwhile reading:

https://futures.io/options-cfd-trading/12309-selling-options-futures-262.html#post375470


Enjoy,

Chris

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Old November 5th, 2014, 02:36 PM   #3787 (permalink)
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Crude Oil

Sold to open 25 January 105 Calls. Credit received 0.03 per contract. Delta 0.01 DTE=41

any thoughts appreciated

again still a beginner

thanks

V

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Old November 5th, 2014, 03:15 PM   #3788 (permalink)
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vmaiya73 View Post
Sold to open 25 January 105 Calls. Credit received 0.03 per contract. Delta 0.01 DTE=41

any thoughts appreciated

What are you fees?

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Old November 5th, 2014, 03:53 PM   #3789 (permalink)
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A lot,

I use optionsxpress so even though I should have collected $750 it was only $626

Commission: $87.50
exchange fee: $36.50

V

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Old November 5th, 2014, 04:19 PM   #3790 (permalink)
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vmaiya73 View Post
Sold to open 25 January 105 Calls. Credit received 0.03 per contract. Delta 0.01 DTE=41

any thoughts appreciated

again still a beginner

thanks

V


One issue I have found after doing this for 2 years is that lower premiums require selling more contracts, and when a trade like that goes bad, it can get ugly quickly.

I think at one point last winter I was short 70 Nat Gas calls, and most of them were sold with low premium. I narrowly escaped that.

Instead of 25 at .03, I'd look for 15 at .05 or something like that, if it can be done. Roughly same amount of premium, but you'll be glad you kept the number of contracts small.

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