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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,288 / 5,727
Last Reply:December 2nd, 2016 (12:40 PM) Attachments:642

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Selling Options on Futures?

Old June 2nd, 2015, 09:15 PM   #4271 (permalink)
Market Wizard
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rsm005 View Post
Ron,

One quick question. Do you guys prefer positions that expire EOM or middle of the month. Does it even matter with this your method?

Thanks,
/rsm005/

The EOM options have far less volume and OI. Makes it harder to get in and out.


Last edited by ron99; June 2nd, 2015 at 11:07 PM.
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Old June 2nd, 2015, 10:59 PM   #4272 (permalink)
Trading Apprentice
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ron99 View Post
The EOM options have far less volume and OI. Makes it easier to get in and out.

Are you sure? I would have thought less volume and OI makes it more difficult to get out of.

Thanks again for this thread Ron! I have been reading and re-reading many pages of the thread and have been doing some small position option trades for several months now. Listening and observing the many "truths" offered here builds confidence and profits!


Last edited by RBtrader; June 2nd, 2015 at 11:00 PM. Reason: spelling error
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Old June 2nd, 2015, 11:08 PM   #4273 (permalink)
Market Wizard
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RBtrader View Post
Are you sure? I would have thought less volume and OI makes it more difficult to get out of.

Thanks again for this thread Ron! I have been reading and re-reading many pages of the thread and have been doing some small position option trades for several months now. Listening and observing the many "truths" offered here builds confidence and profits!

My mistake. Fixed.

You're welcome.

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Old June 3rd, 2015, 12:08 PM   #4274 (permalink)
Elite Member
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Futures Experience: Beginner
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First trade made using my actual trading account. I'll try to keep posting on here to give you guys an idea of how its playing out.

Commodity: ES
Option: OESU5 P1700
Expiration: Sept. 18th 2015
Premium: $5.25
Quantity: 50
Initial Margin: $45,450
Current S&P: 2111.25
Date Position Opened: 6/3/2015
Days to Expiration: 102


Thanks,
/rsm005/

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Old June 3rd, 2015, 01:05 PM   #4275 (permalink)
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Futures Edge on FIO

Are you a NinjaTrader user?

 
That initial margin looks way off.... Another mention: If Fed raises rates before Sept that option is going to go in your face faster than you can blink an eye, very risky position. If you're selling options in ES right now, you should be selling credit put spreads so you at least know where your risk is limited to. Helps weather volatility too.

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Old June 3rd, 2015, 01:06 PM   #4276 (permalink)
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My mistake, did not notice your lot size.

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Old June 4th, 2015, 01:57 PM   #4277 (permalink)
Market Wizard
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TradeAnonymous View Post
That initial margin looks way off.... Another mention: If Fed raises rates before Sept that option is going to go in your face faster than you can blink an eye, very risky position. If you're selling options in ES right now, you should be selling credit put spreads so you at least know where your risk is limited to. Helps weather volatility too.

Don't pay attention to this guy. He doesn't know anything for sure.

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Old June 4th, 2015, 02:53 PM   #4278 (permalink)
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Ron: I was just curious if you would share what your portfolio ratios are approximately? I assume that you trade other futures other than ES. The reason l ask is I am trying to calculate what a safe % of my portfolio I want to apply to a single underlying. I have read a few places that 30 was a good number to ensure that a portfolio is diverse enough that there is a low degree of correlation. I think it would be hard to find that many futures options products that I could apply a variation of this strategy. I could be wrong I am still very new to this compared to you.

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Old June 4th, 2015, 03:14 PM   #4279 (permalink)
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Chubbly View Post
Ron: I was just curious if you would share what your portfolio ratios are approximately? I assume that you trade other futures other than ES. The reason l ask is I am trying to calculate what a safe % of my portfolio I want to apply to a single underlying. I have read a few places that 30 was a good number to ensure that a portfolio is diverse enough that there is a low degree of correlation. I think it would be hard to find that many futures options products that I could apply a variation of this strategy. I could be wrong I am still very new to this compared to you.

I don't know if my current type of trading should be used by traders not in my situation.

I currently am only selling ES puts. Nothing else.

Others that are more diversified should answer your question.

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Old June 4th, 2015, 03:29 PM   #4280 (permalink)
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Ron,

I know you're getting peppered so I apologize for continuing to pile on but let me ask you something about positioning. Suppose the following scenario, you trade with 100 contracts. Do you sell all of them at a single strike or do you split it up across multiple strikes expiring at multiple times?

I'm trying to figure out the best way to structure trades going forward. I put my 50 contracts at 1700 but was debating putting 20 at 1700 and 40 at 1600 and then thought of putting 20 at 1700 in Sept and 50 at 1650 expiring in August. I just kept things simple for now but wanted to know if there is a preference?

/rsm005/

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