I fully agree. It is important to find the right balance between the number of options on the one hand and the risk to get into the money on the other hand. I personally prefer options with a value of at least 200 US$.
I had the same discussion with my broker, and the limit was increased. I often trade future spreads, and here you obviously hold significantly more futures than trading outrights.
Since this is the most popular options thread on futures.io (formerly BMT), I wanted to announce an upcoming webinar:
It is my pleasure to welcome back Carley Garner of DeCarleyTrading for a webinar on Tuesday, March 24th @ 4:30PM ET.
Carley wants to discuss alternatives to naked option selling and engage in a debate about credit spreads.
The topic of the webinar is "Option Selling: With, or without insurance?" and the bullet points include:
- Credit spreads and/or Iron Condors
- Calendar option spreads
- Advantages/Disadvantages given particular scenarios
- Opportunity costs, cost calculations, and margin comparisons
- Understanding the true risk of trading credit spreads and condors
- Determining whether or not credit spread trading is right for you
Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.
Need help? 1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first. 2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses. 3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make. 4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance. 5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers. 6) Help using the forum? Watch this video to learn general tips on using the site.
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The following 3 users say Thank You to Big Mike for this post:
At 19:50 they talk about selling a "Calendarized Strangle" (their words not mine) to both make a directional trade on the CLK/CLN spread and to sell CL vol at these high levels.
At 21:00 they talk about selling "CL Backwardated Ladder Puts" to both make a directional trade on the CL and to sell CL vol.
It was kind of funny seeing somebody as accomplished and revered as Tom Sosnoff get confused about the naming, and sign on the spread.
If anybody watch's it and has questions, post them here and I will do my best to answer them (I trade a lot of CL spreads).
The following user says Thank You to SMCJB for this post:
IB just announced effective Apr 15th triple margin on futures in IRA accounts. No lower day trading rate either.
Most custodians charge about $300 annual fee. Your account will make more money at SPAN minimum margin and paying the $300 and higher commissions than it will with IB's sky high margin and no fee and lower commissions.
Here is the reason that IB is doing this and OX isn't allowing futures and options on futures trading in an IRA at all. If you blow up your IRA account, you can't send in a bunch of money to cover the losses because of the annual contribution limit for IRAs. So they are at risk.
Ive read much of this thread and have Cordier's book which is a fantastic read.. for my IRA (without a custodian) where I cannot be short naked, wondering if anyone has success selling vertical spreads and get enough premium for it.. and do you follow the same rules? same delta for the short? or willing to go higher delta since its a spread? or widen the spread to get more premium knowing you will close it together
I will be frank.. with equity options, i dont get much out of verical spreads or diagonals etc.. to much adjustment needed for too little premium..
hence really liking selling naked far OTM and researching into it.. or a ratio spread.. but both those are tough in a IRA without a custodian