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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:567,770 / 5,727
Last Reply:5 Hours Ago (12:40 PM) Attachments:642

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Selling Options on Futures?

Old February 26th, 2015, 06:45 PM   #4021 (permalink)
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sorry Ron i will study up more

just eager to learn.. i will read up and then come back

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Old February 27th, 2015, 02:21 AM   #4022 (permalink)
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Lesson from my second trade!

One of the biggest things I'm taking away from this entire exercise is to better manage the nuclear levels of stress. This method of options is tauted as "less stressful" by Bill Cordier but I'm not sure what the guy is smoking to calm himself down. At least with puts on stocks, if you get assigned you can sell covered calls until the stock goes back up..but here...it's a very different game.

For example, yesterday I sold May CL P25 and C80. Today the price of CL went down ~5%. It didn't affect my premium at all, the last at market close was still .04c but the total margin shot up like crazy...over 300%. I'm still not at my exit point but it really makes me wonder how the more seasoned guys sleep at night. A part of me is simply saying...F this whole thing and go back to my other hobbies but then I'll have to admit that I quit and I can't do that.

I will probably end up buying a put to help shrink the margin requirements on the next move up.

/rsm005/

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Old February 27th, 2015, 09:04 AM   #4023 (permalink)
World'sWorstTrader
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rsm005 View Post
One of the biggest things I'm taking away from this entire exercise is to better manage the nuclear levels of stress. This method of options is tauted as "less stressful" by Bill Cordier but I'm not sure what the guy is smoking to calm himself down. At least with puts on stocks, if you get assigned you can sell covered calls until the stock goes back up..but here...it's a very different game.

For example, yesterday I sold May CL P25 and C80. Today the price of CL went down ~5%. It didn't affect my premium at all, the last at market close was still .04c but the total margin shot up like crazy...over 300%. I'm still not at my exit point but it really makes me wonder how the more seasoned guys sleep at night. A part of me is simply saying...F this whole thing and go back to my other hobbies but then I'll have to admit that I quit and I can't do that.

I will probably end up buying a put to help shrink the margin requirements on the next move up.

/rsm005/

This morning your position on the TOS platform gave a margin requirement of $860 per one 25/80 May strangle.
Ratio of Margin/(Credit) = approximately 4. I don't see a problem with your position. It is quite possible to see
large UNREALIZED losses for a position. But always monitor your risk (aka the greeks).
The losses are UNREALIZED. Remember it is not over until the fat lady sings.

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Old February 27th, 2015, 09:34 AM   #4024 (permalink)
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rsm005 View Post
One of the biggest things I'm taking away from this entire exercise is to better manage the nuclear levels of stress. This method of options is tauted as "less stressful" by Bill Cordier but I'm not sure what the guy is smoking to calm himself down. At least with puts on stocks, if you get assigned you can sell covered calls until the stock goes back up..but here...it's a very different game.

For example, yesterday I sold May CL P25 and C80. Today the price of CL went down ~5%. It didn't affect my premium at all, the last at market close was still .04c but the total margin shot up like crazy...over 300%. I'm still not at my exit point but it really makes me wonder how the more seasoned guys sleep at night. A part of me is simply saying...F this whole thing and go back to my other hobbies but then I'll have to admit that I quit and I can't do that.

I will probably end up buying a put to help shrink the margin requirements on the next move up.

/rsm005/

First you say you sold a 25-80 strangle then you say it didn't affect my premium at all and was still .04. What are you talking about? The put or the strangle? The strangle premium decreased by .02 to .08. The put was unchanged.

If you are going to make posts then you need to explain things correctly.

SPAN Margin for a May 25 put was 133 on 2/26 and is 167 on 2/27. I don't see the big rise.

SPAN Margin for the May 25-80 strangle was 339 on 2/26 and is 435 on 2/27. I don't see the big rise.

If you did the trade at OX maybe they raised margin. But the SPAN margin minimum did not increase over 300%.

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Old February 27th, 2015, 09:37 AM   #4025 (permalink)
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datahogg View Post
This morning your position on the TOS platform gave a margin requirement of $860 per one 25/80 May strangle.
Ratio of Margin/(Credit) = approximately 4. I don't see a problem with your position. It is quite possible to see
large UNREALIZED losses for a position. But always monitor your risk (aka the greeks).
The losses are UNREALIZED. Remember it is not over until the fat lady sings.

Wow TOS margin is way above SPAN Margin. SPAN is $435.

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Old February 27th, 2015, 02:49 PM   #4026 (permalink)
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I trade ES, EW and CL FOPs through stage5trading.com, worth checking out if you are looking for reasonable SPAN margins, good service imho and a futures and FOP focused broker. Use OEC/GAIN, the same platform as De Carley I believe.

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Old February 27th, 2015, 02:51 PM   #4027 (permalink)
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Should add they don't offer the Softs, from my experience.

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Old February 28th, 2015, 01:39 AM   #4028 (permalink)
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croctrader View Post
I trade ES, EW and CL FOPs through stage5trading.com, worth checking out if you are looking for reasonable SPAN margins, good service imho and a futures and FOP focused broker. Use OEC/GAIN, the same platform as De Carley I believe.

Are you able to let me know the approximate round turn commission and charges for 1 contract of ES options?

Thanks

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Old February 28th, 2015, 03:32 AM   #4029 (permalink)
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tbs8877 View Post
Are you able to let me know the approximate round turn commission and charges for 1 contract of ES options?

Thanks

Depends on volume traded, negotiable on account opening. EW FOPs - 3. 95 in, 0.56 out, inc. clearing, NFA, commissions.

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Old February 28th, 2015, 04:44 AM   #4030 (permalink)
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croctrader View Post
Depends on volume traded, negotiable on account opening. EW FOPs - 3. 95 in, 0.56 out, inc. clearing, NFA, commissions.

Thanks for your quick reply

1. May I confirm that the round turn commission (including clearing NFA) for 1 ES contract is 3.95+0.56=4.51 ?
So commission to BTC the option is cheaper than to STO the option contract?

At TOS which I use, the commission is the same to open the option and to close the option. (No commission if you let the option expire)

At DeCarley Trading which I am not using, I believe the round turn commission is taken upfront. (I think about 8.30 including exchange and other fees)

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