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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,254 / 5,727
Last Reply:December 2nd, 2016 (12:40 PM) Attachments:642

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Selling Options on Futures?

Old March 4th, 2015, 02:43 PM   #4051 (permalink)
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Forex37 View Post
Hi Ron, just sold my first put 1550 June 15 for 4.10 . Additionally excess margin dropped some 630.00 . Is that a fair margin requirement? The firm is Ironbeam.

Kind Regards

SPAN margin is 641.

From what I have seen, all brokers use SPAN margin for ES. If they didn't their customers would run to another firm.

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Old March 4th, 2015, 02:59 PM   #4052 (permalink)
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vmaiya73 View Post
Amazing volatility in coffee; down 9 yesterday almost up 9 today. Definitely oversold so looking for a bounce up. I have /KC 230 calls for about 2 weeks now got in at 0.25/contract

Vijay

Be careful trying to apply technical reasoning to movements in a commodity that are fundamentally driven.

Same thing in CL as KC. I think CL has another leg down because the fundamentals are still extremely bearish. While new drilling is down (rig count), production is still increasing and setting new recent highs every week. The oil well owners hedged their oil with futures or options at prices far higher than futures are now so there is no reason for them to shut down wells.

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CL crashed $15 in May in 2010, 2011 & 2012. We might see that again this year.

A lot of traders have become long at CL at current prices. It will get ugly if we have a $15 drop further this year.

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Old March 4th, 2015, 03:02 PM   #4053 (permalink)
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vmaiya73 View Post
Amazing volatility in coffee; down 9 yesterday almost up 9 today. Definitely oversold so looking for a bounce up. I have /KC 230 calls for about 2 weeks now got in at 0.25/contract

Vijay

Did you buy or sell the calls ? Which month ?

Best regards, Myrrdin

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Old March 4th, 2015, 10:14 PM   #4054 (permalink)
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Coffee

I sold May /KC 230 calls about 2 weeks ago (49 DTE). Already about 50% profit and thinking of either closing them off or holding them till expiration havent decided yet.

thanks

Vijay

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Old March 5th, 2015, 12:43 AM   #4055 (permalink)
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vmaiya73 View Post
I sold May /KC 230 calls about 2 weeks ago (49 DTE). Already about 50% profit and thinking of either closing them off or holding them till expiration havent decided yet.

thanks

Vijay

Vijay,

I almost ended up making a similar trade but did't for a few reasons.

1. My broker actually convinced me not to. She told me that agriculture, especially coffee, tends to "grind down but fall up" due to things like the weather. She also noted that based on my position size, 3 contracts, the fact that I'm selling so far out, and exchange fees on the ICE are higher I'd make very little.

2. I ran out of money . I'm adhering to Ron's margin reserve rules and with my GC and CL positions I'm on the sidelines until I close out one or both or they expire.

3. I'll investigate coffee after/if the market finds a bottom and my other positions free up. For now though, I'm learning one of the most critical skills of this whole game, patience. Lots of patience.

/rsm005/


Last edited by rsm005; March 5th, 2015 at 01:05 AM.
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Old March 5th, 2015, 11:10 AM   #4056 (permalink)
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rsm005 View Post
1. My broker actually convinced me not to. She told me that agriculture, especially coffee, tends to "grind down but fall up" due to things like the weather. She also noted that based on my position size, 3 contracts, the fact that I'm selling so far out, and exchange fees on the ICE are higher I'd make very little.
/rsm005/

It's not how much you make on a trade it is what your ROI is for the trade.

Calculate your Monthly ROI% = 365/DTE/12*(Premium - fees)/(Margin * 3) and see if it meets your goal.

Who is your broker?

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Old March 5th, 2015, 11:30 AM   #4057 (permalink)
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ron99 View Post
It's not how much you make on a trade it is what your ROI is for the trade.

Calculate your Monthly ROI% = 365/DTE/12*(Premium - fees)/(Margin * 3) and see if it meets your goal.

Who is your broker?


- Carley Garner. She's been helping me quite a lot, far more than I really could ask her to given how new I am to the process. She also gave me the lowest fee/rates she can so that helped as well. My only real issue is that the Zaner platform GAIN uses sucks compared to ThinkorSwim. I wish I could mix/match on that.

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Old March 5th, 2015, 02:22 PM   #4058 (permalink)
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rsm005 View Post
exchange fees on the ICE are higher

ICE fees are only 55 cents higher than CME energy fees.

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Old March 5th, 2015, 02:38 PM   #4059 (permalink)
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May /CL

With the dollar on a tear; and oil in major supply. Im looking at:

SELL /CL MAY 76 CALL FOR CREDIT OF .05 PER CONTRACT.

DELTA IS 0.02

any thoughts ?

thanks

Vijay

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Old March 5th, 2015, 02:57 PM   #4060 (permalink)
Market Wizard
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vmaiya73 View Post
With the dollar on a tear; and oil in major supply. Im looking at:

SELL /CL MAY 76 CALL FOR CREDIT OF .05 PER CONTRACT.

DELTA IS 0.02

any thoughts ?

thanks

Vijay

Why 76 and not 75? 76 only has 252 OI. 75 has 7,708 OI. Much easier to get in and out of 75s.

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