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Selling Options on Futures?
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Created: by ron99 Attachments:735

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Selling Options on Futures?

  #3961 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received

Much thanks for the quick replies!
I will definitely check out both of your report and newsletter recommendations.
I can see the September/October drop then rise on the historical charts for corn. Ron and Myrrdin, how exactly would you play that? From my knowledge of options, I'm thinking you could sell calls in early September then buy back and sell puts in October; or you could sell puts in September while the market is still going down in the hopes of collecting higher premium and then wait (hope) for the October turn around and subsequent premium collaspe; or maybe some type of calendar spread to play both sides of the move?
Am I on the right thought process here?

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  #3962 (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, 4,721 received
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psears View Post
Much thanks for the quick replies!
I will definitely check out both of your report and newsletter recommendations.
I can see the September/October drop then rise on the historical charts for corn. Ron and Myrrdin, how exactly would you play that? From my knowledge of options, I'm thinking you could sell calls in early September then buy back and sell puts in October; or you could sell puts in September while the market is still going down in the hopes of collecting higher premium and then wait (hope) for the October turn around and subsequent premium collaspe; or maybe some type of calendar spread to play both sides of the move?
Am I on the right thought process here?

There is a major crop report on the last weekday of Sep. That sets the direction of the markets.

Yes sell calls late Aug (if weather is normal) and sell puts 1st few days of Oct.

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  #3963 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received


Thanks, Ron. BTW: What would really be cool is access to a history book or almanac of sorts that could detail each year's crop and price movement, with the corresponding news items, weather reports, and other commentary that may have caused a course change in the regular seasonal patterns. I think that by studying previous years' chart patterns AND corresponding fundamental news items, you could really get a feel for what happens and why.
Any ideas on where to find history like this?

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  #3964 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 1,042 since Nov 2014
Thanks: 1,416 given, 1,197 received
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psears View Post
Much thanks for the quick replies!
I will definitely check out both of your report and newsletter recommendations.
I can see the September/October drop then rise on the historical charts for corn. Ron and Myrrdin, how exactly would you play that? From my knowledge of options, I'm thinking you could sell calls in early September then buy back and sell puts in October; or you could sell puts in September while the market is still going down in the hopes of collecting higher premium and then wait (hope) for the October turn around and subsequent premium collaspe; or maybe some type of calendar spread to play both sides of the move?
Am I on the right thought process here?

While seasonals are an important element of my trading, there are additional elements: Supply & Demand, weather, COT data etc. I base my trades on all information I can get.

An example: The seasonal charts clearly show rising prices for soybeans from December onwards. In 2014, there was a huge supply in the US. Brazil and Argentine will show a huge supply soon. But prices went up strongly in November and December due to transportation problems. It was obvious that these problems could be solved earlier or later. Thus, I sold calls above the market, and I sold some additional calls recently when there was a chance.

Currently I am positioned (as far as grains & beans are concerned) with short calls in soyeans and corn, and short puts in corn, wheat and cotton. Not all of these trades are according to the seasonal charts.

Thus, I suggest to discuss your question later in the year.

Best regards, Myrrdin

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  #3965 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
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psears View Post
Thanks, Ron. BTW: What would really be cool is access to a history book or almanac of sorts that could detail each year's crop and price movement, with the corresponding news items, weather reports, and other commentary that may have caused a course change in the regular seasonal patterns. I think that by studying previous years' chart patterns AND corresponding fundamental news items, you could really get a feel for what happens and why.
Any ideas on where to find history like this?

Unfortunately, I did not find such information.

Once in a while you will find corresponding comments in Hightower etc. They compare earlier years to the current year, regarding weather etc.

The other way is a lot of work: I take the seasonal charts and longterm charts from MRCI, and look for events in former years via google.

If you work with a broker who does own research for grains, he should be able to assist.

Best regards, Myrrdin

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  #3966 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received

Yeah, I was afraid you were going to say that. You mean I actually have to do it the old fashioned way and put in some hard research work? Gee.... :-)

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  #3967 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 1,042 since Nov 2014
Thanks: 1,416 given, 1,197 received
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psears View Post
Yeah, I was afraid you were going to say that. You mean I actually have to do it the old fashioned way and put in some hard research work? Gee.... :-)

The nice thing about selling options is that you only have to do it once per set of options. And afterwards follow up if there is a significant change in the fundamentals.

And the nice thing about a forum like this one is that we can share this information.

Best regards, Myrrdin

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  #3968 (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, 4,721 received
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psears View Post
Thanks, Ron. BTW: What would really be cool is access to a history book or almanac of sorts that could detail each year's crop and price movement, with the corresponding news items, weather reports, and other commentary that may have caused a course change in the regular seasonal patterns. I think that by studying previous years' chart patterns AND corresponding fundamental news items, you could really get a feel for what happens and why.
Any ideas on where to find history like this?

None that I know of.

If I was smart I would have been saving the OX Hightower pdf every day and I would have that history.

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  #3969 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received

A little more digging into some of the suggestions here has led me to the CRB and MRCI websites, where they have "commodity yearbooks" and other such stuff, including trade recommendations based in seasonals. MRCI also has an option implied volatility chart service that looks pretty good too. I might give one of these guys a try to help hold my hand while I am learning to walk :-)

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  #3970 (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, 4,721 received
Forum Reputation: Legendary



psears View Post
A little more digging into some of the suggestions here has led me to the CRB and MRCI websites, where they have "commodity yearbooks" and other such stuff, including trade recommendations based in seasonals. MRCI also has an option implied volatility chart service that looks pretty good too. I might give one of these guys a try to help hold my hand while I am learning to walk :-)

Also check out https://www.seasonalgo.com/ for seasonal data. I think they are better than MRCI.

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