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Selling Options on Futures?
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Selling Options on Futures?

  #4741 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 240 since Jan 2015
Thanks: 13 given, 191 received

All,

Opened.

Contract: OESX5 P1700
Quantity: 100
Premium: $4.15
Days to Expiration at Open: 95
Initial Margin: $800
Days Open: 0

Contract: OEWX5 P1650
Quantity: 45
Premium: $2.90
Days to Expiration at Open: 95
Initial Margin: $608
Days Open: 0

I will exit this trade in the first week of Sept. no matter what. I don't want to have any positions on during the fed meetings because of the pending interest rate hike.

Thanks,
/rsm005/

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  #4742 (permalink)
Trading for Fun
Ottawa
 
Futures Experience: Advanced
Platform: Many
Favorite Futures: Options
 
Posts: 87 since May 2015
Thanks: 67 given, 87 received


rsm005 View Post
All,

Opened.

Contract: OESX5 P1700
Quantity: 100
Premium: $4.15
Days to Expiration at Open: 95
Initial Margin: $800
Days Open: 0

Contract: OEWX5 P1650
Quantity: 45
Premium: $2.90
Days to Expiration at Open: 95
Initial Margin: $608
Days Open: 0

I will exit this trade in the first week of Sept. no matter what. I don't want to have any positions on during the fed meetings because of the pending interest rate hike.

Thanks,
/rsm005/

Why not trade through and change your IMx3 to an IMx4 or even IMx5?

I think it will cause a disruption just like the yuan news last week did but it won't cause a crash. But then again nobody really knows the future

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  #4743 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 240 since Jan 2015
Thanks: 13 given, 191 received



Chubbly View Post
Why not trade through and change your IMx3 to an IMx4 or even IMx5?

I think it will cause a disruption just like the yuan news last week did but it won't cause a crash. But then again nobody really knows the future

My thought process here is pretty simple, this will be the first interest rate hike in 5+ years so there's just no telling how the market will react and with how much force. The bears have had a lot of chances and reasons to trigger a correction but this one, in my opinion, is the strongest justification yet and I am just more comfortable on the sidelines.

/rsm005/

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  #4744 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 240 since Jan 2015
Thanks: 13 given, 191 received

One observation on this trade which may or may not hold true as it continues to mature.

P1700 seems to lose value faster than P1650 in a market move. Not sure why maybe someone who has more experience can shed light on why.

/rsm005/

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  #4745 (permalink)
Elite Member
Singapore
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES
 
Posts: 13 since May 2015
Thanks: 25 given, 13 received

Since the delta of the P1700 is higher (in absolute terms), when the market moves up, it will lose value more quickly than an option with a lower delta (P1650), all else being equal.


Last edited by virileblood; August 18th, 2015 at 06:08 AM.
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  #4746 (permalink)
Trading Apprentice
Phoenix, AZ/USA
 
Futures Experience: Advanced
Platform: TOS
Favorite Futures: ES
 
Posts: 8 since Oct 2013
Thanks: 2 given, 10 received


Chubbly View Post
Why not trade through and change your IMx3 to an IMx4 or even IMx5?

I think it will cause a disruption just like the yuan news last week did but it won't cause a crash. But then again nobody really knows the future

My feeling is that the interest rate hike in September is already priced in to the market, as it has been telegraphed for quite a while now. The Yuan news took everybody by surprise.

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  #4747 (permalink)
Elite Member
London, United Kingdom
 
Futures Experience: Intermediate
Platform: N/A
Broker/Data: Bloomberg
Favorite Futures: Energies
 
CobblersAwls's Avatar
 
Posts: 281 since Jul 2014
Thanks: 958 given, 353 received


cnncurt View Post
My feeling is that the interest rate hike in September is already priced in to the market, as it has been telegraphed for quite a while now. The Yuan news took everybody by surprise.

I disagree. I would say that people are finally coming to terms with it, but that even still there are doubts we will see a rate rise in september. The first initial rate move itself will bring a modest move, but it will be the confirmation of continued rate rises past the initial one that will hit the hardest.

Just looking at the DXY, it's still not even above it's 52 week high. Bonds/Notes are still not convinced either, with 10s trading in the middle of the yearly range - to me that doesn't indicate 'priced in'.

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  #4748 (permalink)
Trading Apprentice
Phoenix, AZ/USA
 
Futures Experience: Advanced
Platform: TOS
Favorite Futures: ES
 
Posts: 8 since Oct 2013
Thanks: 2 given, 10 received

Good points. All I know with certainty is that every time I try predicting the future, I'm wrong.

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  #4749 (permalink)
Elite Member
Edmonton, Alberta
 
Futures Experience: Advanced
Platform: IB
Favorite Futures: nq
 
Posts: 55 since Jan 2012
Thanks: 27 given, 56 received


cnncurt View Post
Good points. All I know with certainty is that every time I try predicting the future, I'm wrong.

Indeed. If traders got out of the predicting game, they'd be a lot richer.

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  #4750 (permalink)
Trading for Fun
Riga Latvia
 
Futures Experience: Intermediate
Platform: Zaner 360
Favorite Futures: commodyties
 
Posts: 97 since Jan 2013
Thanks: 354 given, 70 received

Boring time


I have stick with some positions on ES:
07/17 sold ESV5 1860/1800 spread at 3$ (IM = 396$, delta =3.18)
07/17 sold ESV5 1880/1780 spread at 5$ (IM = 659$, delta=5.33)

33 days pass and I have not close my positions

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