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Selling Options on Futures?
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Selling Options on Futures?

  #4571 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 260 since Oct 2012
Thanks: 126 given, 75 received


kevinkdog View Post
Why isn't futures contract delta +100?


Delta describes the change in value for one full point.
ES tick is 0.25 = $12.50
So one full point = 4x$12.5 = $50

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  #4572 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 879 since Nov 2014
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kevinkdog View Post
I wondered. I'm using to seeing if as a percentage for options, 0-100.

Obviously, there are different definitions. It would help to use units:

50 $ or 100 % or 1 - all of them are correct. 50 or 100 are not correct in my opinion as an engineer. They are sources of misunderstandings.

Best regards, Myrrdin

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  #4573 (permalink)
Market Wizard
Houston TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 1,862 since Dec 2013
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datahogg View Post
Delta describes the change in value for one full point.
ES tick is 0.25 = $12.50
So one full point = 4x$12.5 = $50

Disagree.
Delta is the sensitivity of the change in value of a derivative instrument as a function of its underlying.
If you think of it as a math formula its ($ change in value of A/$ change in value of B) and the $'s cancel and your left with a percentage.
Note this is different to say vega which is ($ change in value of A/change in volatility of A) which does yield a $ result.

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  #4574 (permalink)
Elite Member
Dallas, Texas
 
Futures Experience: Beginner
Platform: TOS
Favorite Futures: IWM Options
 
Posts: 177 since Oct 2012
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Sold to open 10 /ES Oct 1920 put leveraging 960,000

Don't know how low this pullback is going so I might have to roll down on my two positions (1900 and 1920) but will update.

Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
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  #4575 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 260 since Oct 2012
Thanks: 126 given, 75 received


blb014 View Post
Sold to open 10 /ES Oct 1920 put leveraging 960,000

Don't know how low this pullback is going so I might have to roll down on my two positions (1900 and 1920) but will update.

You are braver than Superman.

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  #4576 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 217 since Jan 2015
Thanks: 13 given, 175 received

All,

To continue my experiment on how a position decays over time and if 90 days or 130 days is preferable I opened the following positions a few days ago.

Contract: OESV5 P1750
Quantity: 80
Premium: $4.55
Days to Expiration at Open: 93
Initial Margin: $978
Days Open: 8
Current IM: $872

Contract: OEWX5 P1750
Quantity: 40
Premium: $9.75
Days to Expiration at Open: 132
Initial Margin: $978
Days Open: 3
Current IM: $1,315 (ouch)

Both positions are currently underwater due to the latest pullback. The first contract has been open for 8 days while the second for just 3 so still very new. Although both positions are underwater by a good chunk I'm not as nervous as I was with my first trade because of how I saw everything play out last time. Huge gaps down didn't kill my position the way I thought it would...things moved in such a way that it gave time the chance eat away at the losses.

Here's to watching a hoping time does its magic again.

/rsm005/

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  #4577 (permalink)
Trading Apprentice
Winona, MN
 
Futures Experience: Advanced
Platform: OX, OEC
Favorite Futures: Selling Futures Options
 
Posts: 3 since May 2012
Thanks: 1 given, 0 received


rsm005 View Post
All,

To continue my experiment on how a position decays over time and if 90 days or 130 days is preferable I opened the following positions a few days ago.

Contract: OESV5 P1750
Quantity: 80
Premium: $4.55
Days to Expiration at Open: 93
Initial Margin: $978
Days Open: 8
Current IM: $872

Contract: OEWX5 P1750
Quantity: 40
Premium: $9.75
Days to Expiration at Open: 132
Initial Margin: $978
Days Open: 3
Current IM: $1,315 (ouch)

Both positions are currently underwater due to the latest pullback. The first contract has been open for 8 days while the second for just 3 so still very new. Although both positions are underwater by a good chunk I'm not as nervous as I was with my first trade because of how I saw everything play out last time. Huge gaps down didn't kill my position the way I thought it would...things moved in such a way that it gave time the chance eat away at the losses.

Here's to watching a hoping time does its magic again.

/rsm005/

The great thing about selling options is that you have zero percent knowledge about which way the market will go tomorrow but 100% knowledge about which way DTE is going to go tomorrow.

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  #4578 (permalink)
Elite Member
Dallas, Texas
 
Futures Experience: Beginner
Platform: TOS
Favorite Futures: IWM Options
 
Posts: 177 since Oct 2012
Thanks: 418 given, 90 received


datahogg View Post
You are braver than Superman.

Not really I'm selling 10-15 contracts at a time. Some of the quantities posted on here are a lot braver than me! All it takes is a bank failure to send premium skyrocketing.

Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
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  #4579 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 260 since Oct 2012
Thanks: 126 given, 75 received


blb014 View Post
Not really I'm selling 10-15 contracts at a time. Some of the quantities posted on here are a lot braver than me! All it takes is a bank failure to send premium skyrocketing.

That is true, but I was looking at how close you are to price.

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  #4580 (permalink)
Trading Apprentice
Vlaanderen Belgium
 
Futures Experience: Advanced
Platform: IB
Favorite Futures: Oil, spy, es, estx50
 
Posts: 19 since Jul 2015
Thanks: 1 given, 3 received


I fear that one major correction could easily wipe out blb014 entire capital.

Black swan happened in the past and they will occur in the future with disastrous consequences for many beginners in the business of put selling.

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