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Selling Options on Futures?
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Selling Options on Futures?

  #3791 (permalink)
Trading for Fun
Reno, USA
 
Futures Experience: Intermediate
Platform: esignal
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Posts: 70 since Jul 2011
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Thanks kevin,

appreciate the insight

V

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  #3792 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 270 since Oct 2012
Thanks: 126 given, 75 received

?

For those that have the experience using this product, is SeasonAlgo helpful for the far out of the money short
puts that we sell here?

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  #3793 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,700 since Jul 2011
Thanks: 781 given, 4,720 received
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datahogg View Post
For those that have the experience using this product, is SeasonAlgo helpful for the far out of the money short
puts that we sell here?

Yes seasonal charts are helpful for FOTM option selling. I'm about to subscribe myself soon. I had been getting Moore's but Seasonal Algo is better.

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  #3794 (permalink)
Market Wizard
Houston, TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
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datahogg View Post
For those that have the experience using this product, is SeasonAlgo helpful for the far out of the money short
puts that we sell here?

I've had a seasonalgo.com sub for about 4 months now after somebody on these forums mentioned it.
I've been trading entirely spread positions (which I know is not what you asked) and have had limited success with it.
My win/loss % is decent but unfortunately my average win/average loss is skewed the wrong way, primarily due to one badly managed trade.
It obviously has a wealth of information but I'm struggling to formalize a plan to use it.
One word of warning is that (at least for spreads) it uses EOD data, and as such all the drawdown and Stop Loss information is severely underestimated.

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  #3795 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 270 since Oct 2012
Thanks: 126 given, 75 received


ron99 View Post
Yes seasonal charts are helpful for FOTM option selling. I'm about to subscribe myself soon. I had been getting Moore's but Seasonal Algo is better.

I am guessing that you are not using Moore's for spread trading? How are you using Moore's for FOTM puts?

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  #3796 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
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datahogg View Post
I am guessing that you are not using Moore's for spread trading? How are you using Moore's for FOTM puts?

Yes I used it for spread trading. Why not?

I look at seasonal charts to see if there if a strong historical average movement one way or the other for a commodity I am thinking about selling options. I then compare that to current fundamentals to see if the two are in alignment. If so I then sell the opposite side of the expected trend.

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  #3797 (permalink)
Trading for Fun
St Paul, MN, USA
 
Futures Experience: Advanced
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datahogg View Post
I am guessing that you are not using Moore's for spread trading? How are you using Moore's for FOTM puts?


In the FWIW Dept, while I believe MRCI built their business on seasonal analysis, spread analysis, and to some extent correlation analysis, they also have some useful option data.

Sample Pages

(see Volatility Charts and Daily Volatility Report)

The Weekly and Monthly Volatility Charts are valuable to know where the current market is compared to history: http://www.mrci.com/sample/week.pdf

I bought their service for several years just for the daily IV data and the long term volatility charts. I'm not a current subscriber, but when you consider all you get, their service is a pretty good value. If I ran the show, I'd carve out a separate options subscription, upgrade the design and delivery a bit, and charge about the same price ala carte for options as I did for the whole package.

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  #3798 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 270 since Oct 2012
Thanks: 126 given, 75 received


ron99 View Post
Yes I used it for spread trading. Why not?

I look at seasonal charts to see if there if a strong historical average movement one way or the other for a commodity I am thinking about selling options. I then compare that to current fundamentals to see if the two are in alignment. If so I then sell the opposite side of the expected trend.

"Yes I used it for spread trading. Why not?"

I would not use it for spread trading (+/- futures in different months) because I have zero (0) knowledge and
experience with this type trading.

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  #3799 (permalink)
Elite Member
Toronto Ontario Canada
 
Futures Experience: Intermediate
Platform: IB TWS, IB WebTrader
Favorite Futures: ES
 
Posts: 4 since Nov 2011
Thanks: 1 given, 1 received


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

Trouble is, when the credit is so small you have to sell a lot of contracts and then the margin adds up. (Even if the commission is small, need to consider the margin.) So you think you're getting a great percentage gain but imo not really because it ties up too much money in margin. ie I think it's important to compare gain to required margin, not just gain to risk. Hope this makes sense.

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  #3800 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,700 since Jul 2011
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susan View Post
Trouble is, when the credit is so small you have to sell a lot of contracts and then the margin adds up. (Even if the commission is small, need to consider the margin.) So you think you're getting a great percentage gain but imo not really because it ties up too much money in margin. ie I think it's important to compare gain to required margin, not just gain to risk. Hope this makes sense.

Using 3X margin for IM + excess this trade makes about 4.5-4.9% monthly ROI depending on costs. Nothing wrong with that.

IM = $117 Excess = $234 Total IM + Excess = $351

Monthly ROI=365/DTE/12*Net Profit/(Total IM + Excess)

Assuming $7 costs
Monthly ROI=365/41/12*(30-7)/351

Monthly ROI=4.86%

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