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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:568,629 / 5,727
Last Reply:December 2nd, 2016 (12:40 PM) Attachments:642

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Selling Options on Futures?

Old June 13th, 2015, 07:59 PM   #4351 (permalink)
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The posts are getting off subject of the thread. I kindly ask to stay on subject.

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Old June 13th, 2015, 08:47 PM   #4352 (permalink)
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To help bring this thread back on the rails let me ask a rather simple question which will certainly apply to ES but may apply to other commodities. Is there any particular time of year or interval where you don't want to hold short puts? For example, next year is a major election or during the end of the calendar year or right before tax season.

Thanks,
/rsm005/

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Old June 13th, 2015, 09:28 PM   #4353 (permalink)
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rsm005 View Post
To help bring this thread back on the rails let me ask a rather simple question which will certainly apply to ES but may apply to other commodities. Is there any particular time of year or interval where you don't want to hold short puts? For example, next year is a major election or during the end of the calendar year or right before tax season.

Thanks,
/rsm005/

I can't think of any normal occurrences where I wouldn't have any puts on.

ES usually dips the first two weeks of April but it isn't consistent and it isn't enough of a dip that it would force you out.

I checked out ES during Fed meeting announcements. No pattern.
https://futures.io/index-futures-trading/36019-es-s-p-500-futures-contract-day-fed-meeting-announcement.html

ES dipped in May for 3 years in a row. 2010-2012. But the last 3 no dip.

The only consistent one is don't sell puts on morning of the day of futures expiration. For example, next Friday 6/19. Three-fourths of the time the price at 8:30 am ET will be higher than the settlement at 4 pm. But that one didn't work the last two expirations.

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Old June 14th, 2015, 01:15 AM   #4354 (permalink)
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rsm005 View Post
To help bring this thread back on the rails let me ask a rather simple question which will certainly apply to ES but may apply to other commodities. Is there any particular time of year or interval where you don't want to hold short puts? For example, next year is a major election or during the end of the calendar year or right before tax season.

Thanks,
/rsm005/

I would say for this year be especially careful around September/October. Market is historically weak around that time, plus the Fed may hike interest rate for 1st time at the September meeting. Market almost always corrects when first rate increase comes. I would reserve more than 2/3 in cash and put on some hedges (short futures or buy a small number of ES put options closer to the money). The hedges may or may not be effective, but wth as long as I can sleep well at night.

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Old June 14th, 2015, 09:20 AM   #4355 (permalink)
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rsm005 View Post
To help bring this thread back on the rails let me ask a rather simple question which will certainly apply to ES but may apply to other commodities. Is there any particular time of year or interval where you don't want to hold short puts? For example, next year is a major election or during the end of the calendar year or right before tax season.

Thanks,
/rsm005/

I agree with Ron for ES puts. For other commodities there are situations when I do not want to be short options.

Example Grains: There are monthly reports from the USDA / WASDE on Supply and Demand. Some of these reports are well known for bringing out very large moves (limit moves). Beginners should not be short options on these days.

Best regards, Myrrdin

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Old June 14th, 2015, 02:03 PM   #4356 (permalink)
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myrrdin,

could you please share, when these major reports for the Agriculturals come out,
mainly the ..... USDA / WASDE on Supply and Demand report(s)

Thanks

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Old June 14th, 2015, 02:20 PM   #4357 (permalink)
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mdsvtr View Post
myrrdin,

could you please share, when these major reports for the Agriculturals come out,
mainly the ..... USDA / WASDE on Supply and Demand report(s)

Thanks

Agency Reports | USDA Newsroom (click on calendar view for entire month)

The monthly WAOB/WASDE report is usually about the 10th of the month. With boring markets and heavy supplies, it hasn't hurt to hold short options through these reports recently, but...

I wouldn't recommend doing that during the Quarterly Stocks Report, the Planting Intentions Reports, or the mid-summer through harvest monthly WASDE reports.

Limit moves are rare, but accompanied by a big jump in volatility, they can be very painful.

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Old June 14th, 2015, 03:28 PM   #4358 (permalink)
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CafeGrande View Post
Agency Reports | USDA Newsroom (click on calendar view for entire month)

The monthly WAOB/WASDE report is usually about the 10th of the month. With boring markets and heavy supplies, it hasn't hurt to hold short options through these reports recently, but...

I wouldn't recommend doing that during the Quarterly Stocks Report, the Planting Intentions Reports, or the mid-summer through harvest monthly WASDE reports.

Limit moves are rare, but accompanied by a big jump in volatility, they can be very painful.

I agree. My simple message: If you hold short options in the granis or beans through these reports you should know what you do.

Best regards, Myrrdin

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Old June 14th, 2015, 04:49 PM   #4359 (permalink)
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CafeGrande,
Thank you for your reply as well

Ron,
Thank you for starting this thread and for sharing your knowledge and expertise

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Old June 15th, 2015, 08:26 PM   #4360 (permalink)
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Just joined


Hello just found this forum. Very interested in selling options in futures.
Still reading the thread and Cordier's book.
If one of you full timers can outline your typical day trading I would appreciate it.
Just trying to get started in this business. THANKS

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