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Selling Options on Futures?
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Selling Options on Futures?

  #441 (permalink)
Elite Member
Milton Keynes UK
 
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ron99 View Post
I have my money at 3 different brokers for protection in case one of them blows up. OX, OEC and ADM. So that adds to the quantity of trades too.

Open Ecry is futures only, right. ADM is the commodities brokerage, how do they compare to OX with regards to margin, service, commisions etc. I have opened an OX account but not yet funded it, so are ADM a potential alternative for futures options.

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  #442 (permalink)
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ron99 View Post
I still have my Mar 250s. With the steady downward trend in futures I wasn't up for selling puts. But I think now may be the time to sell them. May 110s? Of course I should have done that on Monday.

We got the HH and then a HL and trend change on zigzag. The total volume on the down legs are easing and the last two 10.3k and 17k are now less than the up legs which have all been 23-24k.

I have exited my KC 200 calls at 0.0011 for an almost 80% gain. Tried to get the 120's off at 0.0006 for 80% but no takers today.

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  #443 (permalink)
Market Wizard
Cleveland, OH
 
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britkid99 View Post
Open Ecry is futures only, right. ADM is the commodities brokerage, how do they compare to OX with regards to margin, service, commisions etc. I have opened an OX account but not yet funded it, so are ADM a potential alternative for futures options.

OpenECry (OEC) does do options. Their trading platform is very fast. Their fees are low. You do have to negotiate for them to not charge overnight fees on contracts. They were willing to do that for me. They charge SPAN minimum margin on all contracts!

Their problems are
1. They don't have the ability to calculate option margins in their platform. So they set you up with a arbitrary number of contracts you can trade. But since I trade far OTM options and do large quantities I am butting up to the limit. But they don't understand that since I am only using 10-20% of my balance for IM and hitting their limit that it is not a risk. If I pester them enough they eventually raise the contract limit. A hassle but not a deal breaker.

2. Their back office is horrible. Problems with trades. With them closing positions that hadn't expired because they had the wrong expiration date. They were fined $250,000 by CFTC for incorrectly calculating Russian Ruble prices. They did not correctly compute Whey prices in my account.

The CFTC order finds that for a period of months prior to June 2010, OEC failed to detect and correct a flaw in software it offered its customers for trading futures contracts that miscalculated the customers’ intraday profits and losses from trading the Russian ruble futures contract. As a result of the flaw, the order finds that the software that OEC offered its customers calculated profits and losses resulting from trades in the ruble contract at only 10 percent of actual amounts. OEC was unaware of the flaw, according to the order.

June 7, 2012
Also, according to the order, over a period of several hours in June 2010, a Russian national, Marat Yunusov, exploited the ruble calculation error and OEC’s supervision failures. Yunusov engaged in a fraudulent prearranged trading scheme using his OEC account in which he traded more than 20,000 ruble contracts through 372 individual trades, as well as an additional 70,000 E-micro British pound futures contracts with an account that he controlled at another FCM, the order finds. Yunusov’s ruble trading generated an actual loss of approximately $9 million in his OEC account, which roughly matched the ruble profits in the account he controlled at the other FCM, the order finds. As a result of the flaw, however, OEC’s systems inaccurately reflected a ruble loss of only $900,000 rather than $9 million.
https://www.nfa.futures.org/BasicNet/Case.aspx?entityid=0326789&case=12-24&contrib=CFTC

4. Here's a big one. They were owned by OX but operated totally separate. But last year they were sold to GAIN CAPITAL GROUP (Forex.com). I have serious reservations about them.

a. The CFTC determined in 2010 that when a novice trader called them and opened an account and placed a 2 lot trade and then the next day liquidated both positions. CFTC said that they should have never took the order for the 2nd position. They awarded the trader $10,000 in lost profit on the 1st contract.
http://www.cftc.gov/LawRegulation/Dispositions/idwest112511

b. On June 30, 2010, NFA issued a Complaint against Gain and Stevens that cited Gain for engaging in margin and liquidation practices that had a detrimental impact on certain of Gain's customers on certain slipped trades, failing to maintain records for certain unfilled orders that were placed on the MetaTrader trading platform prior to May 2009, failing to adequately review the activities and promotional material of Gain's unregulated solicitors, failing to respond promptly to certain inquiries and requests made by NFA during NFA's audit of Gain and, together with Stevens, failing to supervise the firm's operations.
https://www.nfa.futures.org/basicnet/Case.aspx?entityid=0339826&case=10BCC00015&contrib=NFA
They paid a $459,000 fine 10/2010.

c. Gain stock is down 50% since it opened Dec 2010. 35% the last 12 months.

d. The BBB has 5 complaints on file about them.

So despite all of this I still have an OEC account. I was worried before Gain bought them. But felt that OX owning them would cover any major problems. I am more worried now since they were sold to Gain. So it has the lowest balance of my 3 accounts.

I have the ADM account because the broker I use for dairy trading uses them. The broker charges double+ fees that I pay at the other 2. I use the brokers' trading platform (free) not ADM's so I have no experience using ADM platform. Their back office has not been a problem. Exchange minimum margins. I have been there 1 year. Solid trustworthy company.

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  #444 (permalink)
Market Wizard
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britkid99 View Post
We got the HH and then a HL and trend change on zigzag. The total volume on the down legs are easing and the last two 10.3k and 17k are now less than the up legs which have all been 23-24k.

I have exited my KC 200 calls at 0.0011 for an almost 80% gain. Tried to get the 120's off at 0.0006 for 80% but no takers today.

OK this is interesting. I sold 3 KC Mar 200 calls today at 0.0011. Were those yours? It looks like that was the only trade today for that strike.

I also sold a 210 for 0.0007.

2.2% Monthly ROI for me. Good safe deal for my IRA account. But probably a good idea for you to close them because of the margin required and so little premium left.

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  #445 (permalink)
Market Wizard
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ICE softs margin changes effective Jan 8th.

Coffee drops by 25%! Cocoa down 24%. OJ up.

https://www.theice.com/publicdocs/futures_us_reports/all/Futures_US_Margin_Requirements.pdf

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  #446 (permalink)
Trading for Fun
Houston, Texas
 
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ron99 View Post
OK this is interesting. I sold 3 KC Mar 200 calls today at 0.0011. Were those yours? It looks like that was the only trade today for that strike.

LMAO! Ron99 and Britkid99, you guys are too funny! If it's the only posted trade then you guys probably did trade with each other! Hahahahahaha!

How much premium are you going to get Ron99 selling 3 KC Mar 200 calls at 0.0011? $123.75?

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  #447 (permalink)
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Milton Keynes UK
 
Futures Experience: Intermediate
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ron99 View Post
OK this is interesting. I sold 3 KC Mar 200 calls today at 0.0011. Were those yours? It looks like that was the only trade today for that strike.

I also sold a 210 for 0.0007.

2.2% Monthly ROI for me. Good safe deal for my IRA account. But probably a good idea for you to close them because of the margin required and so little premium left.

Pleasure doing business with you sir. From my perspective I am happy to take 80% quickly and move on no point waiting for the last $40. Can I interest you in some 120's puts, do you a good deal. LOL

@MJ888 - Your figures are correct

Brit

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  #448 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,709 since Jul 2011
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MJ888 View Post
LMAO! Ron99 and Britkid99, you guys are too funny! If it's the only posted trade then you guys probably did trade with each other! Hahahahahaha!

How much premium are you going to get Ron99 selling 3 KC Mar 200 calls at 0.0011? $123.75?

That premium may not sound like much but when you can make 25% per year in an IRA or trust account doing this trade all year, I'll be laughing to the bank. I don't know anywhere else you can make that kind of money. Year after year.

I have some money with a mutual fund. He wonders why I am not tickled pink at his 10% gain last year.

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  #449 (permalink)
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Exactly...

It's all about ROI and not the $$$.

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  #450 (permalink)
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Richmond, VA/USA
 
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Iron Condors vs Naked Strangles?


Alright everyone, I would like to get a discussion going on trading naked strangles vs iron condors. ROI, Black Swan protection, profitability; these are all topics to be addressed.

For those who trade just one side, we can discuss selling credit/debit spreads vs naked calls and puts too.

On the surface, hedged vs non-hedged both have their plusses and minuses, but in the long run one strategy must have an edge over the other?

Thoughts?

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