Selling Options on Futures? (Page 404) - Options on Futures | futures.io
futures.io futures trading
 

Go Back   futures.io

> Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures


Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:567,835 / 5,727
Last Reply:9 Hours Ago (12:40 PM) Attachments:642

Welcome to futures.io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.


You'll need to register in order to view the content of the threads and start contributing to our community. It's free and simple, and we will never resell your private information.

-- Big Mike
     

Reply
 642  
 
Thread Tools Search this Thread

Selling Options on Futures?

Old February 28th, 2015, 05:00 AM   #4031 (permalink)
Elite Member
Perth, Australia
 
Futures Experience: Intermediate
Platform: InvestorRT, S5Trader (OEC), Optionvue7
Broker/Data: Stage5 (OEC/GAIN)
Favorite Futures: ES, EW Options on Futures
 
croctrader's Avatar
 
Posts: 6 since Jul 2010
Thanks: 81 given, 9 received


tbs8877 View Post
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)

Sounds like same as De Carley. Detail is as follows: STO=Clearing+NFA+CommUpfront=0. 55+0.01+3.38=3.94, BTC=Clearing+NFA=0.55+0.01=0.56,Total RT=4.50.

Reply With Quote
     
The following user says Thank You to croctrader for this post:
     

Old February 28th, 2015, 05:58 AM   #4032 (permalink)
Elite Member
Singapore
 
Futures Experience: Intermediate
Platform: Ninjatrader meta trader
Favorite Futures: oil
 
Posts: 13 since Aug 2012
Thanks: 55 given, 2 received


croctrader View Post
Sounds like same as De Carley. Detail is as follows: STO=Clearing+NFA+CommUpfront=0. 55+0.01+3.38=3.94, BTC=Clearing+NFA=0.55+0.01=0.56,Total RT=4.50.

SO Decarley RT Cost is about double Stage5trading RT cost. I guess she adds more value?

But for my style which is selling far OTM ES for small premium, stage5trading cost makes more sense to me.

I wonder whether stage5trading margin is the same as Decarley (which uses minimum span margin) or say OEC as they all use GAIN. I am not sure how GAIN is related to all of them. Anyone has any thoughts?

Reply With Quote
     

Old February 28th, 2015, 11:48 AM   #4033 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 257 since Oct 2012
Thanks: 126 given, 75 received

No more.



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.



No more comments from me. I'm out.

Reply With Quote
     
The following user says Thank You to datahogg for this post:
     

Old February 28th, 2015, 09:21 PM   #4034 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received

Nat Gas Seasonal Question

Hello,

Can anyone familiar with nat gas trading answer this question for me: Last years' EIA storage figures for this time last year were around 1362 Bcf, which is 40% less than the 5 year average of 1968 Bcf (which is right about what we are at this year now). Since the seasonal tendency is for nat gas to begin rising around February into the Spring injection/storage season, why was last years' rise so muted?
You would think that with the storage supplies of Feb 2014 being so far under the average, that the price would have rallied more sharply off the Feb 2014 lows, right?
Even more curious is that in 2012, the EIA storage figures for February 2012 were around 2600 Bcf, a 5 year high. That year, Nat gas did rally sharply over a dollar heading into injection season. The exact opposite of what I would think would happen.

The reason I'm asking is that I'm thinking about selling May 2015 nat gas puts now, and what to get a feel for what type of move up I can expect this year going into injection season, being that current storage supplies are right at the 5 year average.

Thoughts?

Reply With Quote
     

Old March 1st, 2015, 12:32 PM   #4035 (permalink)
Elite Member
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 679 since Nov 2014
Thanks: 1,031 given, 550 received

Futures Edge on FIO

Are you a NinjaTrader user?

 

psears View Post
Hello,

Can anyone familiar with nat gas trading answer this question for me: Last years' EIA storage figures for this time last year were around 1362 Bcf, which is 40% less than the 5 year average of 1968 Bcf (which is right about what we are at this year now). Since the seasonal tendency is for nat gas to begin rising around February into the Spring injection/storage season, why was last years' rise so muted?
You would think that with the storage supplies of Feb 2014 being so far under the average, that the price would have rallied more sharply off the Feb 2014 lows, right?
Even more curious is that in 2012, the EIA storage figures for February 2012 were around 2600 Bcf, a 5 year high. That year, Nat gas did rally sharply over a dollar heading into injection season. The exact opposite of what I would think would happen.

The reason I'm asking is that I'm thinking about selling May 2015 nat gas puts now, and what to get a feel for what type of move up I can expect this year going into injection season, being that current storage supplies are right at the 5 year average.

Thoughts?

In winter, storage figures for NG strongly depend on temperatures in the US. In 2014 there was a severe cold snap in February, thus storage figures declined. You find details on the option premiums during this period in this thread.

I intend to sell 2.0 NG puts for the June or July contract. I will wait for lower prices (eg. after a warmer weather forecast), and sell within the next 3 ot 4 weeks.

Best regards, Myrrdin

Reply With Quote
     

Old March 2nd, 2015, 10:40 AM   #4036 (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 Myrrdin for the reply. I'm still wondering though how the current storage supplies end up affecting the upcoming injection season. Or do they? If the current storage supplies don't affect the ability of the commercial buyers to stockpile for the summer cooling season, then how do they compensate? With increased production?
Just how do you forecast how aggressively the commercials will be buying for summer (and therefore, driving the price heading into it)?

Reply With Quote
     

Old March 2nd, 2015, 12:01 PM   #4037 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,900 received
Forum Reputation: Legendary


psears View Post
Hello,

Can anyone familiar with nat gas trading answer this question for me: Last years' EIA storage figures for this time last year were around 1362 Bcf, which is 40% less than the 5 year average of 1968 Bcf (which is right about what we are at this year now). Since the seasonal tendency is for nat gas to begin rising around February into the Spring injection/storage season, why was last years' rise so muted?
You would think that with the storage supplies of Feb 2014 being so far under the average, that the price would have rallied more sharply off the Feb 2014 lows, right?
Even more curious is that in 2012, the EIA storage figures for February 2012 were around 2600 Bcf, a 5 year high. That year, Nat gas did rally sharply over a dollar heading into injection season. The exact opposite of what I would think would happen.

The reason I'm asking is that I'm thinking about selling May 2015 nat gas puts now, and what to get a feel for what type of move up I can expect this year going into injection season, being that current storage supplies are right at the 5 year average.

Thoughts?

The May 2012 NG contract dropped almost a dollar from Feb to expiration. I don't see the dollar rise. 2013 went up a dollar.

Increased production is the answer to your 2014 question. Mar 2014 production was up 5% YoY.

Also the seasonal tendency from 10-30 years ago does not work now. The tendency for NG for the years 2007-2014 (excluding abnormal 2008) is flat for Feb to expiration for the May contract.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).



I quit looking at seasonal data for more than 5 years out for most commodities.

With NG production extremely strong now, NG prices will probably drop more when the weather warms up. I bought Apr NG 2.75 puts last Wed for 0.078.

Reply With Quote
     
The following 3 users say Thank You to ron99 for this post:
     

Old March 2nd, 2015, 12:37 PM   #4038 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,580 since Dec 2013
Thanks: 1,392 given, 2,347 received
Forum Reputation: Legendary

NG Storage

Re: NG Storage

ICE End of Withdrawal Season Storage Future is currently 1455/1500.
While this is above the 1420 low put in last week (before our much smaller than expected draw) this is still considerably below 1740s that traded almost exactly a month ago. The strong recent cold in the MW & NE have potentially averted what could have been a very large (& interesting) storage surplus.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

Reply With Quote
     
The following 2 users say Thank You to SMCJB for this post:
     

Old March 2nd, 2015, 02:09 PM   #4039 (permalink)
Trading Apprentice
Richmond, VA/USA
 
Futures Experience: None
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Nov 2012
Thanks: 3 given, 8 received

Ron,
I checked out the 2012 NG chart courtesy of my free trial of MRCI and you are correct - the price did drop a dollar going into May '12. I swear the first (not MRCI) chart I looked at didn't do that
:-)
I'm getting conflicting views; perhaps you can straighten them out for me. I just read a new article by James Cordier (finished his book, BTW - pretty good) and he discusses selling June 2.00 NG puts now since he believes that historically, NG has tended to rise from Feb into May due to cooling/injection season buying by the commercials.
However, you said you just put on the exact opposite trade ( buying ATM puts), so you must think the price will be heading TOWARDS $2.00 instead of away. You both can't be right. According to the last five years of charts I just printed out, they tend to favor your hypothesis (although, based on last years' wacky chart, I'm not sure I want to trade Nat gas at all now!)

What's the deal?

Reply With Quote
     

Old March 2nd, 2015, 02:51 PM   #4040 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,323 since Jul 2011
Thanks: 634 given, 3,900 received
Forum Reputation: Legendary



psears View Post
Ron,
I checked out the 2012 NG chart courtesy of my free trial of MRCI and you are correct - the price did drop a dollar going into May '12. I swear the first (not MRCI) chart I looked at didn't do that
:-)
I'm getting conflicting views; perhaps you can straighten them out for me. I just read a new article by James Cordier (finished his book, BTW - pretty good) and he discusses selling June 2.00 NG puts now since he believes that historically, NG has tended to rise from Feb into May due to cooling/injection season buying by the commercials.
However, you said you just put on the exact opposite trade ( buying ATM puts), so you must think the price will be heading TOWARDS $2.00 instead of away. You both can't be right. According to the last five years of charts I just printed out, they tend to favor your hypothesis (although, based on last years' wacky chart, I'm not sure I want to trade Nat gas at all now!)

What's the deal?

Cordier is looking at 15 and 30 year charts. He hasn't learned that things have changed. He should be looking at the MRCI 5 year chart.

IMO he writes a good book but he isn't a very good trader. My last year having an account with him, 2011, I lost 28%.

Re: last year in NG. These things happen. You need to learn from what happened and be ready next time something similar happens. Learn the lesson it taught you. But don't quit trading it.

One thing I have learned over the years is, don't do this year what you should have done last year (unless it is a strong seasonal).

For example, you should have been long NG last year. So you get long this year. And even though weather was cold this Feb, that didn't work out because NG production is so strong. US Heating Degree Days for Dec & Jan were less than normal. Nov above normal.

Last year HDD for Dec, Jan, Feb & Mar were all above normal. And especially above normal in areas that use more NG.

Reply With Quote
     
The following user says Thank You to ron99 for this post:
     

Reply



futures.io > Futures Trading, News, Charts and Platforms > Traders Hideout > Options on Futures > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

NinjaTrader 8: Features and Enhancements, Tips and Tricks

Dec 6
 

Al Brooks: Stop Losing when a Good Trade goes Bad, Correcting Mistakes

Elite only
 

Trading Technologies: Algo Design Lab hands-on

Dec 13
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Crude Oil (CL) futures inverse pairing options Big Mike Commodities Futures Trading 8 December 12th, 2013 12:00 PM
Recommend futures, options Broker? sam1197 Brokers and Data Feeds 17 March 27th, 2013 01:42 AM
Trading Futures with options as protection Gooffy2010 Commodities Futures Trading 6 October 2nd, 2012 05:55 PM
Selling Njniatrader sam1197 NinjaTrader 22 June 28th, 2012 01:40 PM
Zen-Fire Futures options tici88 Brokers and Data Feeds 1 July 30th, 2011 10:16 AM


All times are GMT -4. The time now is 10:23 PM.

Copyright © 2016 by futures.io. All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
 
no new posts

Page generated 2016-12-02 in 0.18 seconds with 20 queries on phoenix via your IP 54.197.75.176