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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,052 / 5,727
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Selling Options on Futures?

Old January 3rd, 2013, 12:39 PM   #411 (permalink)
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Mark59 View Post
Margin on IB for this is 3298 to sell 1 option!!

Today SPAN is 464. OX is 557. OX is 20% over SPAN.

Interesting that IM at OX dropped from 751 to 557 from Monday to Wednesday.

3298 is 611% more than SPAN!!!!

If you sold this option for 0.0013 at IB your ROI% is 0.3%. Not worth doing.

In IB's ads they suck you in with the super low fees but they never mention that basically they don't want option sellers.


Last edited by ron99; January 3rd, 2013 at 12:46 PM.
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Old January 3rd, 2013, 12:47 PM   #412 (permalink)
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ron99 View Post
Today SPAN is 464. OX is 557. OX is 20% over SPAN.

Interesting that IM at OX dropped from 751 to 557 from Monday to Wednesday.

3298 is 611% more than SPAN!!!!

In IB's ads they suck you in with the super low fees but they never mention that basically they don't want option sellers.

It makes it very hard to trade! I would gladly pay more if I could get margin closer to yours. Gold is over 5k for one option!

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Old January 3rd, 2013, 01:08 PM   #413 (permalink)
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Sold CL April 120 calls for .12, Delta .027 , 71 days to expiration
I had previously sold the April 65 Puts for .12 as well
Cheers

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Old January 3rd, 2013, 01:53 PM   #414 (permalink)
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Mark59 View Post
Sold CL April 120 calls for .12, Delta .027 , 71 days to expiration
I had previously sold the April 65 Puts for .12 as well
Cheers

Was there a bid at .12 or did you place the ask at .12 and get hit?

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Old January 3rd, 2013, 03:56 PM   #415 (permalink)
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Mark59 View Post
Sold CL April 120 calls for .12, Delta .027 , 71 days to expiration
I had previously sold the April 65 Puts for .12 as well
Cheers

Looks good mark59!

Before finding this thread, I had entered an April CL strangle back in mid December. I sold three April 70 puts for 0.72 and then a few days later I sold three April 105 calls for 0.62, I do not recall what the Delta was when I entered these positions but if I had to guess it was between 0.15-.020. Before you guys scream and yell at me that those strikes are too close and now that I have followed this thread for a few weeks, I DO recognize that I may indeed be too close but I choose these strikes based on Cordier's recommendation in his book to look for strikes with Delta under 0.20. Since I am already in this trade and the puts are doing quite nicely, showing a gain of $1,673.04 and the calls are taking some heat showing a loss of $306.96 so overall I have a paper gain of $1,366.08, I will not change anything for now.

Oh yes, the IM for these THREE CL options at IB is $13,590 and the MM is $10,872, these figures have gone up the past week since CL has rallied a bit.

So Ron99, please tell everyone what my IM and MM would be if I had this same position over at OX! We all need a laugh!

I am guessing IM would be about $4,530 and MM would be about $3,624

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Old January 3rd, 2013, 04:01 PM   #416 (permalink)
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ron99 View Post
Was there a bid at .12 or did you place the ask at .12 and get hit?

Ron

my .12 was the ask & got hit after couple hours.

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Old January 3rd, 2013, 04:16 PM   #417 (permalink)
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Back in March of 2012, I had a problem with how the overnight margin was calculated at IB. I was trading ZC (corn) options. Had on a decent sized strangle. I noticed that every day at the close of trading at 2 PM est, IB for reason used their own market price. On many instances, the price they used was much higher than the actual closing or settlement price. This would of course cause my IM and MM to spike higher for no reason, not to mention that this did not reflect the true P/L of my positions. I checked several different sites and found that all the sites had the SAME numbers at settlement but for some reason, IB's were different. There were even a few times where IB stated that the premium was at a price that WAS NEVER EVEN traded at during the session.

I called IB and I explained it all and even sent in daily screen shots at 1:59 pm and then again at 2:01 pm and show them what I was referring to. I asked them how is it possible that IB states my position at a premium that was not EVER traded? And I said look if you that is the price that IB is stating then can I sell 100 contracts based on that price? No response! All he said was that the markets are now closed. After a month or so IB could not figure out why this was happening. They simply passed the buck and said that the closing quotes are supplied by a 3rd party and that is what they go by!

So you guys that are using IB, Britkid99 and Mark59, take a close look at your Market Price and Market Value and compare it to the settlement numbers at other sites and see if you notice any discrepancies.

I am in the process of unwinding my positions at IB and will be moving my options selling operation, probably to OX. Which is somewhat sad because I have been with IB since 2003 and I very much like their trading platform. But now I see that IB is limiting my profit potential so it's time to move on................

MJ888


Last edited by MJ888; January 3rd, 2013 at 04:23 PM.
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Old January 3rd, 2013, 05:09 PM   #418 (permalink)
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MJ888 View Post
Back in March of 2012, I had a problem with how the overnight margin was calculated at IB. I was trading ZC (corn) options. Had on a decent sized strangle. I noticed that every day at the close of trading at 2 PM est, IB for reason used their own market price. On many instances, the price they used was much higher than the actual closing or settlement price. This would of course cause my IM and MM to spike higher for no reason, not to mention that this did not reflect the true P/L of my positions. I checked several different sites and found that all the sites had the SAME numbers at settlement but for some reason, IB's were different. There were even a few times where IB stated that the premium was at a price that WAS NEVER EVEN traded at during the session.

I called IB and I explained it all and even sent in daily screen shots at 1:59 pm and then again at 2:01 pm and show them what I was referring to. I asked them how is it possible that IB states my position at a premium that was not EVER traded? And I said look if you that is the price that IB is stating then can I sell 100 contracts based on that price? No response! All he said was that the markets are now closed. After a month or so IB could not figure out why this was happening. They simply passed the buck and said that the closing quotes are supplied by a 3rd party and that is what they go by!

So you guys that are using IB, Britkid99 and Mark59, take a close look at your Market Price and Market Value and compare it to the settlement numbers at other sites and see if you notice any discrepancies.

I am in the process of unwinding my positions at IB and will be moving my options selling operation, probably to OX. Which is somewhat sad because I have been with IB since 2003 and I very much like their trading platform. But now I see that IB is limiting my profit potential so it's time to move on................

MJ888

I have noticed this also. You are refering to the the market price and market value on the Account panel? During market hours it often lags badly and is showing old data. Not sure how frequently it is meant to update. When the market is closed it often shows prices outside the quoted bid/ask, can be in your favor or against. I just ignore it when market is closed. Another reason to keep decent size cash buffer.

For instance my KC Mar13 200 calls which currently shows bid/ask of 0.0009/0.0022 & closed price of 0.0020 and the IB market price states 0.00072 (5 decimal places). In this case wrongly inflating my profit on the position, i sold at 0.0053

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Old January 3rd, 2013, 05:16 PM   #419 (permalink)
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britkid99 View Post
I have noticed this also. You are refering to the the market price and market value on the Account panel? During market hours it often lags badly and is showing old data. Not sure how frequently it is meant to update. When the market is closed it often shows prices outside the quoted bid/ask, can be in your favor or against. I just ignore it when market is closed. Another reason to keep decent size cash buffer.

For instance my KC Mar13 200 calls which currently shows bid/ask of 0.0009/0.0022 & closed price of 0.0020 and the IB market price states 0.00072 (5 decimal places). In this case wrongly inflating my profit on the position, i sold at 0.0053

The settlement for Jan 3rd for that option is 0.0011. The last trade for the day was 0.0020.

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Old January 3rd, 2013, 05:23 PM   #420 (permalink)
Market Wizard
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MJ888 View Post
Looks good mark59!

Before finding this thread, I had entered an April CL strangle back in mid December. I sold three April 70 puts for 0.72 and then a few days later I sold three April 105 calls for 0.62, I do not recall what the Delta was when I entered these positions but if I had to guess it was between 0.15-.020. Before you guys scream and yell at me that those strikes are too close and now that I have followed this thread for a few weeks, I DO recognize that I may indeed be too close but I choose these strikes based on Cordier's recommendation in his book to look for strikes with Delta under 0.20. Since I am already in this trade and the puts are doing quite nicely, showing a gain of $1,673.04 and the calls are taking some heat showing a loss of $306.96 so overall I have a paper gain of $1,366.08, I will not change anything for now.

Oh yes, the IM for these THREE CL options at IB is $13,590 and the MM is $10,872, these figures have gone up the past week since CL has rallied a bit.

So Ron99, please tell everyone what my IM and MM would be if I had this same position over at OX! We all need a laugh!

I am guessing IM would be about $4,530 and MM would be about $3,624

SPAN is $6,042 IM. $5,493 MM.

OX is $7,250 IM. $6,592 MM.

I have no idea how IB calculates its' margin. Earlier we figured on a Mar 65 put it was 310% over SPAN. But on this strangle it is only 125% over.

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