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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:567,971 / 5,727
Last Reply:22 Hours Ago (12:40 PM) Attachments:642

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Selling Options on Futures?

Old November 12th, 2014, 04:00 PM   #3801 (permalink)
Trading Apprentice
Toronto Ontario Canada
 
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You're right! I was thinking emini S&P FOP. Once contract needs several thousand margin.

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Old November 16th, 2014, 04:13 AM   #3802 (permalink)
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Singapore
 
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wow... this is indeed a very great forum with many interesting posts on futures options! I am very glad to have found this forum as there aren't many out there which talk about future options so extensively!

hi all in this forum, I have been selling options for a number of years, starting out with stock options initially and then moved into futures options, ES. also doing commodities options like grains, energy, etc.

wd

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Old November 21st, 2014, 06:46 AM   #3803 (permalink)
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Option selling positions


I am glad to find a forum of traders selling options. As probably many of you, I was made aware of this topic some years ago reading the book of Cordier & Gross. I trade more or less according to their suggestions, but there are exceptions. Main exception is that in cases where I have a clear opinion of the next move I also sell close to the money options. But this is only a small share of my portfolio. And in some cases I go beyond half a year of time left until expiry.

I would appreciate to discuss current and future positions here. Currently I hold

SN15 C1200
BOH15 C33
WH15 C600
SBH15 P16.5
CTK15 P60
LHJ15 C90
NGH15 C7

Recently I sold the grains, NG and CT options, some months ago SB and LH.

I would appreciate your comments, and further trade suggestions.

Best regards from Austria, Myrrdin


Last edited by myrrdin; November 21st, 2014 at 08:01 AM. Reason: Error
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Old November 21st, 2014, 09:49 AM   #3804 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
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Hedge

Has anyone had good or bad experiences with trying to hedge deep out of the money puts with a short future
contract(s) in order to mitigate delta (minimize delta)? Thanks in advance.

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Old November 21st, 2014, 10:13 AM   #3805 (permalink)
Market Wizard
OH
 
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Futures Edge on FIO

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myrrdin View Post
I am glad to find a forum of traders selling options. As probably many of you, I was made aware of this topic some years ago reading the book of Cordier & Gross. I trade more or less according to their suggestions, but there are exceptions. Main exception is that in cases where I have a clear opinion of the next move I also sell close to the money options. But this is only a small share of my portfolio. And in some cases I go beyond half a year of time left until expiry.

I would appreciate to discuss current and future positions here. Currently I hold

SN15 C1200
BOH15 C33
WH15 C600
SBH15 P16.5
CTK15 P60
LHJ15 C90
NGH15 C7

Recently I sold the grains, NG and CT options, some months ago SB and LH.

I would appreciate your comments, and further trade suggestions.

Best regards from Austria, Myrrdin

Wow those are extremely risky options. Some of them are ITM. I would never trade anything like those. You need to be a lot further OTM.

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Old November 21st, 2014, 10:14 AM   #3806 (permalink)
Market Wizard
OH
 
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datahogg View Post
Has anyone had good or bad experiences with trying to hedge deep out of the money puts with a short future
contract(s) in order to mitigate delta (minimize delta)? Thanks in advance.

Mostly bad. The futures would reverse and I ended up losing money on the futures.

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Old November 21st, 2014, 10:45 AM   #3807 (permalink)
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ron99 View Post
Wow those are extremely risky options. Some of them are ITM. I would never trade anything like those. You need to be a lot further OTM.

Thank you for your comment.

As I mentioned usually some of my positions are ITM or ATM in case I have a very strong opinion concerning a market and the volatility is not sufficient to get satisfying premium (eg. currently cotton). Most of the time the number of these positions is smaller than currently.

Usually I enter positions betwees 300 and 1000 US$ per option, and delta of 0.1 - 0.2. I never trade very "cheap" options of less than 100 US$, as the number of options for a position would get too big, and, thus, the risk in case of a surprising move to the wrong direction would be significant.

Would you like to share some of your current favourite positions ?

Best regards, Myrrdin

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Old November 21st, 2014, 10:46 AM   #3808 (permalink)
Elite Member
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datahogg View Post
Has anyone had good or bad experiences with trying to hedge deep out of the money puts with a short future
contract(s) in order to mitigate delta (minimize delta)? Thanks in advance.

I tried it some years ago, but was not able to avoid losses in the futures.

Best regards, Myrrdin

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Old November 21st, 2014, 11:35 AM   #3809 (permalink)
Market Wizard
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myrrdin View Post
Thank you for your comment.

As I mentioned usually some of my positions are ITM or ATM in case I have a very strong opinion concerning a market and the volatility is not sufficient to get satisfying premium (eg. currently cotton). Most of the time the number of these positions is smaller than currently.

Usually I enter positions betwees 300 and 1000 US$ per option, and delta of 0.1 - 0.2. I never trade very "cheap" options of less than 100 US$, as the number of options for a position would get too big, and, thus, the risk in case of a surprising move to the wrong direction would be significant.

Would you like to share some of your current favourite positions ?

Best regards, Myrrdin

I only do options with deltas < 0.03. No where near as high as you.

Nobody that has posted in this thread sells ATM or ITM options except you.

I suggest you read the thread and see what we have been doing.

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Old November 21st, 2014, 12:03 PM   #3810 (permalink)
Elite Member
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ron99 View Post
I only do options with deltas < 0.03. No where near as high as you.

Nobody that has posted in this thread sells ATM or ITM options except you.

I suggest you read the thread and see what we have been doing.

I am aware that this thread is based on the ideas of Cordier & Gross. And I like these ideas, and most of my option selling trades since around 2005 were according to their concept. But I thought it might be interesting for some traders here to read about other concepts of selling options, which I applied successful in recent years. Anyway, in future I will only communicate and discuss trade ideas within the frame of Cordier & Gross. I hope that is ok for you.

Cordier & Gross suggest to sell options with deltas lower than 0.20 (=20 %). Thus, the trades I would like to discuss here (and I hope you allow for a small tolerance concerning delta) are

SN15 C1200
WH15 C600
NGH15 C7

I am looking forward to an interesting and fruitful discussion on these and other option selling trades.

Best regards, Myrrdin

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