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Selling Options on Futures?
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Selling Options on Futures?

  #3931 (permalink)
Elite Member
Singapore
 
Futures Experience: Intermediate
Platform: Ninjatrader meta trader
Favorite Futures: oil
 
Posts: 13 since Aug 2012
Thanks: 55 given, 2 received


ron99 View Post
Here are my 2014 results for selling options. These are options closed in 2014.

I did 9 losing trades of 245 contracts that were net losers of $76,042.58. 7 of these were NG closed in Jan 2014.
I did 364 profitable trades of 10,191 contracts that had a net profit of $349,488.68.

So total was net +$273,446.10. Winning percentage of trades was 97.6%.

I had sold options in CC, CL, CT, DA, ES, GC, HO, KC, LC, NG, RB, & S.

Since 2008 I have made 4,797 trades selling 60,484 contracts with a net profit of $639,598.12.

Congratulations. Excellent result.

Based on the above the average premium received is $34 and the average loser is $310.

It appears that it is better to collect very small amounts for this method to be successful. I am guessing that the deltas when the contracts were sold are in the 2% areas.

I am wondering how you treat adjustments (say rolling further down when threaten) in the above results - were they counted as losses and the new rolled down contracts if they were profitable treated as profitable.

Anyway good work!

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  #3932 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,573 since Jul 2011
Thanks: 740 given, 4,414 received
Forum Reputation: Legendary


tbs8877 View Post
Congratulations. Excellent result.

Based on the above the average premium received is $34 and the average loser is $310.

It appears that it is better to collect very small amounts for this method to be successful. I am guessing that the deltas when the contracts were sold are in the 2% areas.

I am wondering how you treat adjustments (say rolling further down when threaten) in the above results - were they counted as losses and the new rolled down contracts if they were profitable treated as profitable.

Anyway good work!

Correct on the deltas.

I did not do any adjustments in 2014.

This year I am selling ES puts for about 2.00 that are 80-100 DTE. Taking profit when they are at 0.50-0.80.

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  #3933 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,573 since Jul 2011
Thanks: 740 given, 4,414 received
Forum Reputation: Legendary



k20a View Post
I added futures selling in June, I only traded CL, can't find enough liquidity in other symbols. I find utilizing the excess cash to do other trades (that can be closed any time whenever CL margin increases.) makes a great combination.

Good job with the 53%.

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  #3934 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 219 since Jan 2015
Thanks: 13 given, 178 received

Some interesting lessons learned today....

1. Yikes! That 8% rally was painful to watch and I'm very close to my exit point in my position.
2. Selling naked positions is not for the faint of heart. As previously stated by John.
3. The Ratio Spread saved me from a forcible exit.
4. 27% out of the money sounds like a lot but the cushion can go away very fast.
5. The fundamentals are still in my favor but I just need to be patient and watch my margins.

/A/

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  #3935 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 260 since Oct 2012
Thanks: 126 given, 75 received


rsm005 View Post
Some interesting lessons learned today....

1. Yikes! That 8% rally was painful to watch and I'm very close to my exit point in my position.
2. Selling naked positions is not for the faint of heart. As previously stated by John.
3. The Ratio Spread saved me from a forcible exit.
4. 27% out of the money sounds like a lot but the cushion can go away very fast.
5. The fundamentals are still in my favor but I just need to be patient and watch my margins.

/A/

Entered on 01/24/15 to expire on 03/18/15.

-3 28P
+1 29P

-1 74C
+1 75C
-2 76C.

Margin = 2200 (Today).

I didn't even notice there was a rally with this posiiton.

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  #3936 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,573 since Jul 2011
Thanks: 740 given, 4,414 received
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datahogg View Post
Entered on 01/24/15 to expire on 03/18/15.

-3 28P
+1 29P

-1 74C
+1 75C
-2 76C.

Margin = 2200 (Today).

I didn't even notice there was a rally with this posiiton.

What premiums did you buy and sell at for each option?

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  #3937 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 219 since Jan 2015
Thanks: 13 given, 178 received

Well, lesson learned and my next trade will def. be structured a bit more differently. I'm also switching brokers to one that charges lower margins, DeCarley. My trade was structured to pay out a decent premium while still maintaining what I thought was a high level of cushion. I still believe I'm right and that $58 will be very difficult to reach but it's surviving the margin hold. Next time, win or lose, I'll go further out and run a few additional protection plays.

/A/

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  #3938 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,573 since Jul 2011
Thanks: 740 given, 4,414 received
Forum Reputation: Legendary


rsm005 View Post
Well, lesson learned and my next trade will def. be structured a bit more differently. I'm also switching brokers to one that charges lower margins, DeCarley. My trade was structured to pay out a decent premium while still maintaining what I thought was a high level of cushion. I still believe I'm right and that $58 will be very difficult to reach but it's surviving the margin hold. Next time, win or lose, I'll go further out and run a few additional protection plays.

/A/

As you are learning, it's not whether your strike goes ITM it's whether you can ride out the loss of premium and the increase in margin. So you need to pick a strike that will allow you to do that and not pick a strike that you don't think futures will reach. They aren't the same.

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  #3939 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 260 since Oct 2012
Thanks: 126 given, 75 received

CL


ron99 View Post
What premiums did you buy and sell at for each option?


CL - Strangle.doc

The attached file should have the info.
Notice that I sold the protective strangle.

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  #3940 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 219 since Jan 2015
Thanks: 13 given, 178 received



datahogg View Post
Attachment 173595

The attached file should have the info.
Notice that I sold the protective strangle.

Thanks for sharing this. Maybe I'm being thick but for some reason I just can't follow the information in there. What was the net from each side of the strangle? Can you walk me through it? Seems like I'm forgetting everything I've read about this...<sigh>.

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