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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,059 / 5,728
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Selling Options on Futures?

Old January 3rd, 2013, 06:04 PM   #421 (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

Yes Britkid99 I am referring to exactly the market price and market value on the account panel. And yes, you are right that sometimes the numbers can be in my favor too. Either way, it is not reflecting my true P/L, especially when the markets are closed. I too keep a cash buffer but the combination of inflated margins and wrong closing prices can distort the value of an account temporarily since the numbers usually correct themselves around midnight.

Ron99, do you have this issue with your options positions at OX? At IB, the market price of the premium sometimes fluctuates even when the markets are closed.

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Old January 3rd, 2013, 06:29 PM   #422 (permalink)
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Here we go, an example of what I am referring to britkid99: CL options are closed right now. The market price on my April 105 calls is showing 0.82037 but the last trade on the IB platform is showing 0.72 and when I check for settlement price elsewhere it is showing 0.74 so where is IB getting 0.82037 from? I have seen even wider discrepancies in the past.

Ron99, what does it the settlement show in OX for the April 105 calls?

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Old January 3rd, 2013, 06:32 PM   #423 (permalink)
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I am really glad there's a topic on options on futures,

this is something that I always wanted to get back around to and learn,

I'll take the time to read and catch up on this thread....

hey, Micro E-mini futures, how do you find them in contrast to Options of Futures?

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Old January 3rd, 2013, 06:36 PM   #424 (permalink)
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I just checked the CME prices for April CL 105 calls. High today was 0.78 Low was 0.72 and closed at 0.72 so basically it NEVER even traded at 0.82 so why does it say 0.82 on my IB account page?

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Old January 3rd, 2013, 06:40 PM   #425 (permalink)
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Futures Edge on FIO

Are you a NinjaTrader user?

 
MJ8888:

Last quote for the April CL 105 calls was 0.74

The range for today was 0.72 to 0.78

This is from OX

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Old January 3rd, 2013, 06:43 PM   #426 (permalink)
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ron99 View Post
I have been selling options on futures for years. But it is rare to find others doing it. I was wondering if there are others here doing it.

I have been doing it for 5 years. Learned it from James Cordier's book.

I have sold energy, grain, softs and metal options. Far out of the money. Usually less than 90 days from expiration.

yeah, these were my sentiments too,

one basic question, do you try to avoid the Financials, given their significant volatility?, especially since they go towards extreme ranges within the mean / average trading range of prices, and from an options perspective, only complex condor and straddles might possibly benefit profitably, certainly not straight forward calls or puts in anticipation of predictable or anticipate one direction price moves?

these are some of the questions and issues that drove me from equity / index option trading at the CBOT and ASE, and towards basket trading ETF's and Emini futures....

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Old January 3rd, 2013, 06:58 PM   #427 (permalink)
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opts View Post
MJ8888:

Last quote for the April CL 105 calls was 0.74

The range for today was 0.72 to 0.78

This is from OX

Thanks opts. That is what I got too from the CME site

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Old January 3rd, 2013, 07:36 PM   #428 (permalink)
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MJ:

I've seen option daily settlement prices do wacky things several times. I've had closing prices be a lot higher or lower than the daily range, sometimes the price is zero. But, more often then not the correct settlement price shows up.

IB might be inflating the spread somewhat for their benefit also....not sure. I was going to mention the spread might be due to low volume but the April 105 call has 5,319 contracts = lots of volume there.

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Old January 3rd, 2013, 07:41 PM   #429 (permalink)
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I found a detailed explanation on how SPAN is calculate on ICE. In case, anyone is interested.

Attached Thumbnails
Selling Options on Futures?-span_explanation.pdf  
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Old January 3rd, 2013, 07:47 PM   #430 (permalink)
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opts,

It generally corrects at around midnight. Like right now the April CL 105 calls are showing a price of 0.80, it was at 0.83 earlier. I have no idea where IB is getting these quotes from cause as far as I can tell, there have been no volume traded on this strike in the night session.

I only have a position of 3 right now but in the past I have traded a much larger volume like when I traded ZC I had a position size of 40 so these weird price quotes have cause my account balance to fluctuate for no apparent reason. Because of these weird prices, my balance have been known to be off by 5k to 10k or more in the past.

MJ888

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