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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,132 / 5,728
Last Reply:December 6th, 2016 (05:26 PM) Attachments:642

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Selling Options on Futures?

Old April 27th, 2015, 05:07 PM   #4131 (permalink)
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tennessee/USA
 
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Thank you Ron. Yes, I thought those were loss.

Thank you for your generous sharing. It is a great strategy, I am collecting very low premium on selling ES put now b/c of the low vix recently, it is great to try a new strategy.




ron99 View Post
Are you asking about the red background on the chart you quoted? Those are the best return days for that option. Those are all positive numbers.


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Old April 27th, 2015, 05:14 PM   #4132 (permalink)
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I read that IB isn't option seller friendly. I'm probably beating a dead horse or missing something. However, I have a portfolio margin account, which gives 4x buying power couldn't I use the buying power to mitigate the issue?

For example, on April 24, a Q2015 ES put @ 1600 has a SPAN IM of USD 594. IB's IM is ~ USD 1800.


Last edited by volemont; April 27th, 2015 at 05:22 PM.
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Old April 27th, 2015, 06:38 PM   #4133 (permalink)
Market Wizard
OH
 
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volemont View Post
I read that IB isn't option seller friendly. I'm probably beating a dead horse or missing something. However, I have a portfolio margin account, which gives 4x buying power couldn't I use the buying power to mitigate the issue?

For example, on April 24, a Q2015 ES put @ 1600 has a SPAN IM of USD 594. IB's IM is ~ USD 1800.


Quoting 
However, Portfolio Margin compliance is updated by IB throughout the day based on the real-time price of the equity positions in the Portfolio Margin account. Please note, at this time, Portfolio Margin is not available for U.S. commodities futures and futures options, U.S. bonds, Mutual Funds, or Forex positions

https://www.interactivebrokers.com/en/?f=margin&p=pmar

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Old April 29th, 2015, 10:15 PM   #4134 (permalink)
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volemont View Post
I read that IB isn't option seller friendly. I'm probably beating a dead horse or missing something. However, I have a portfolio margin account, which gives 4x buying power couldn't I use the buying power to mitigate the issue?

For example, on April 24, a Q2015 ES put @ 1600 has a SPAN IM of USD 594. IB's IM is ~ USD 1800.

They also have a fee imposed for large 'worst case scenario' losses on position (regardless if spread, wide spreads etc). on my account right now for example, selling 10 June1900 puts on ES for 6 points (at 6.9 delta right now), you would be charged $2.74 per day the position is open. have to gripe again about this, it tends to add up quick

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Old April 30th, 2015, 02:58 AM   #4135 (permalink)
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Futures Edge on FIO
Does anyone here use Interactive Brokers for futures options?

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Old April 30th, 2015, 03:30 AM   #4136 (permalink)
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trader77 View Post
Does anyone here use Interactive Brokers for futures options?

I used my stock account at IB for a while to sell options on futures. But obviously IB does not have any interest in option selling, and does everything to prevent their customers from selling options.

Thus, I moved my account for selling options.

Best regards, Myrrdin

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Old April 30th, 2015, 06:39 AM   #4137 (permalink)
Silver bullet
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myrrdin View Post
But obviously IB does not have any interest in option selling, and does everything to prevent their customers from selling options.

for what kind of reason and only for future options or also options on stocks? What stopped you from doing that?

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Old April 30th, 2015, 06:49 AM   #4138 (permalink)
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PK 1 View Post
for what kind of reason and only for future options or also options on stocks? What stopped you from doing that?

I moved my account for selling options on futures. ( I do not trade options on stocks.) The main reasons were:

High margin for naked short options.
Some thin OTM options in the commodities are not tradable.
Incorrect calculation of account value, which led to forced liquidation. Value of short options is calculated intraday as the value to buy them back via a market order. (Liquidated positions were bought back by IB at their cost.)

Best regards, Myrrdin

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Old April 30th, 2015, 02:59 PM   #4139 (permalink)
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2 questions for the more seasoned traders out here./


1. How much have you see the dollar affect commodities prices? Enough to counteract fundamentals?

2. When you all calculate annual ROI do you only use the amount of cash that's set aside for reserves or the entire value of the account? If 60% of the account is in cash in the event of a margin rush is it bad math to use that dollar amount when calculating your ROI?

Thanks

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Old April 30th, 2015, 03:51 PM   #4140 (permalink)
Market Wizard
OH
 
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rsm005 View Post
2 questions for the more seasoned traders out here./


1. How much have you see the dollar affect commodities prices? Enough to counteract fundamentals?

Yes for any commodity that has major import and export volumes.

2. When you all calculate annual ROI do you only use the amount of cash that's set aside for reserves or the entire value of the account? If 60% of the account is in cash in the event of a margin rush is it bad math to use that dollar amount when calculating your ROI?

Thanks

You should always use the entire value of account.

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