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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,332 / 5,728
Last Reply:December 6th, 2016 (05:26 PM) Attachments:642

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Selling Options on Futures?

Old August 2nd, 2015, 10:30 PM   #4641 (permalink)
Market Wizard
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I have posted a poll which appears at the top of every page of this thread.

I want to see how readers of this thread are doing with their trading. I think it will be a good reference point to people unfamiliar with trading.

So go ahead and do the poll. The answers are anonymous.

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Old August 2nd, 2015, 10:41 PM   #4642 (permalink)
Market Wizard
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blb014 View Post
I have no angle in this discussion to "make up stuff".

Go look at chart if you don't believe. CL ran up $40 + from Jan 2008 to July. Then CL sold off the gains it had made for the year. And didnt start tanking below $100 Jan 2008 low until after, the fall of Lehman Brothers. All the way down 30ish at the 2008. Besides Do you think the recent fall in CL signals another financial crisis and great recession? I think not

Since I'm making this "stuff up" here's a CL chart

Here's a ES chart

And the debt ceiling has been raised so many times over the years that would not have been a precursor to the S&P downgrade in 2011

There's your proof, I have no reason to make up anything.

My last post on this hindsight trading topic, no sense in arguing about it.

Since you edited this post. I am going to respond.

You said "2. The debt ceiling was being raised every month back in 2011 because Congress would kick the can down the road." This is clearly false despite your poor effort to justify it.

You also said, "The market also rebounded in Aug and first part of September 2008". This is false because the market peaked 8/11/08.

I'll give you that what you said here, "But CL didn't start tanking below $100 until the fall of Lehman Brothers all the way down to $30ish at the end of 2008", is technically correct even though I think a $40 drop in two months is tanking.

You first made a mistake saying things that weren't true. Then you made it worse by poorly trying to justify your points. You lost all credibility.

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Old August 2nd, 2015, 11:07 PM   #4643 (permalink)
Market Wizard
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I was asked what economic fundamentals I look at to determine whether to be selling ES puts or not. I keep a spreadsheet (I have over 250 spreadsheet pages of data and charts for my trading in various commodities) I nicknamed recession indicator. I did not have it in 2007-2008 and I wish I did because I would have made even more money. But we should all learn from our mistakes and I have it now.

Here are some of the charts in it.

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Plus I look at these reports. Most are monthly.
Economic Calendar - Bloomberg

As you can see housing dropped severely in 2007. Retail sales and corporate profits started down in early 2008.

Of course you also have to follow what congress and the rest of the world is up to.

BTW a debt ceiling increase is needed in Sep. The Fed mtg announcement in Sep will be important. It will be a crazy month that I may sit out or reduce my amount of trading for part of it. I'll know when we get closer. But remember IMO I am more risk adverse right now than the average trader.


Last edited by ron99; August 2nd, 2015 at 11:38 PM.
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Old August 2nd, 2015, 11:22 PM   #4644 (permalink)
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\ron,

Where did you get the data for these charts?

/rsm005/

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Old August 2nd, 2015, 11:34 PM   #4645 (permalink)
Market Wizard
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Futures Edge on FIO

rsm005 View Post
\ron,

Where did you get the data for these charts?

/rsm005/

New Residential Construction
New Residential Sales
Existing-Home Sales | realtor.org
Monthly & Annual Retail Trade, Main Page - US Census Bureau
Corporate Profits

The Bloomberg page will have small charts of some of that data.

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Old August 3rd, 2015, 06:41 AM   #4646 (permalink)
Trading Apprentice
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Big Mike View Post
Just now reading this thread, and I invite @ron99 to place you on ignore if you continue to basically call the people here liars.

I want to chime in that I was > 200% YTD return personally, on about 10x the risk rate of ES. I say "was" because I stopped posting all my broker statements because of users like you, so these days I don't share my returns any more because it wasn't worth the headache of defending them. The 200% figure was as of March 31, the last time I publicly shared all my statements.

I have nothing to sell, I spend time posting simply to help others -- as does @ron99. Ron runs a great thread, and I don't want him getting discouraged just because some people can't see the value. Ron has nothing to sell, same as me. He isn't a vendor. It's fine to question people that have ulterior motives and there is plenty of that on other trading forums, but there is none here.

You also need to understand there is a big difference between an individual trader that is trading a six or seven figure account, and an institution trading ten figure accounts (or more). It should go without saying that returns are not symmetrical with the invested money at play.

I'm not a fantastic trader, nor am I smart enough to trade options. So I have no difficulty believing that @ron99 would consistently outperform me in terms of risk to return.

If you want to call me a liar or continue trolling, go ahead, and that will be the end of your invitation to visit futures.io (formerly BMT).

Mike

Can you show me where i use the word 'liar'?

I don't question the returns of Ron. He started selling ES puts in 2011 and now look at the chart of the S&P. It went up all the time. So ofcourse selling DOTM options were profitable. Ofcourse!

The point i made was:
1) Huge returns comes with higher risk. This is a law in finance. If the reverse was true, why would anybody buy indexfunds if can earn more with less risk?
2) You can't foresee all the following crashes. Nobody can.
3) There is no big deal in selling DOTM options in a rising stock market. The real test is how you survive in big corrections lasting one year (or longer) like 2008.

But no problem. I wont post anything in this thread anymore.
I'm leaving. I wish you all the best.

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Old August 3rd, 2015, 09:15 AM   #4647 (permalink)
World'sWorstTrader
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Hills View Post
I would like to share a link I've found interesting:

Think Tank Charts 2 - David Larew - Public ChartList - StockCharts.com

It is very profitable to sell PUTS in the green dots. You don't need to wait for 1 month to lose 50% of the value. In my case my record is in 4 days. I hope this link will help you in the future

I was able to plot the $SPX at stockcharts.com, but where do you find the Put/Call ratio? I didn't see it in the pop up
menu.

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Old August 3rd, 2015, 09:36 AM   #4648 (permalink)
Silver bullet
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datahogg View Post
I was able to plot the $SPX at stockcharts.com, but where do you find the Put/Call ratio? I didn't see it in the pop up
menu.

As indicator use Price and as parameters for the price the symbol. The chart has used this twice, the first with symbol $NYADV:$CPC and the second with $ONE:$CPC. Also you can do the reverse having the ratios as the primary symbol and $SPX above or below it as an indicator.

Btw. It's a very valuable thread so I hope the heat of the recent discussions won't have affect on the thread. For myself I do options on equities but wishing to change partly to options on commodities and ES maybe ... in the meanwhile reading this huuuuge thread

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Old August 3rd, 2015, 01:50 PM   #4649 (permalink)
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CafeGrande View Post
I don't doubt that, however, for the new people it should be noted that you had some implied volatility tail winds, or at least they weren't head winds.

During the month of July, ATM IV increased by about 3 points and put skew, as measured by 10-delta risk reversals, actually declined from about -.10 to -.07 during the month. For the newbies, the latter is a good thing if you were short puts coming into July.

So a short put position during a month of a 20% decline in the underlying could have worked. But a similar position from Oct 2014 to March 2015 could have led to painful losses, or at best a long, painful wait until expiration was nearer and IV/IV skew stabilized.

I should have mentioned that I had both call and puts on at the start of the month of July when it was around $59-61 range. At that point I was neutral since I thought it was range bound but that was quickly changed as we are down $14 (over 20%) from 1 month ago
As long as they keep adding rigs in the US it seem to keep going down

My ROI for CL was 2% for July

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Old August 3rd, 2015, 02:30 PM   #4650 (permalink)
Market Wizard
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Chubbly View Post
I should have mentioned that I had both call and puts on at the start of the month of July when it was around $59-61 range. At that point I was neutral since I thought it was range bound but that was quickly changed as we are down $14 (over 20%) from 1 month ago
As long as they keep adding rigs in the US it seem to keep going down

My ROI for CL was 2% for July

I know many in the media are watching drilling rigs, but it is far more important to watch oil production. The wells being started now are much more productive than in the past.

North Dakota drillers completed an unusually high number of superwells flowing >2000 b/d in July

Production has hardly dropped even though drilling rigs have dropped by quite a but.

This Week In Petroleum Crude Oil Section

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