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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,610 / 5,734
Last Reply:8 Hours Ago (01:01 AM) Attachments:642

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Selling Options on Futures?

Old August 17th, 2015, 12:57 PM   #4741 (permalink)
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vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
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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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Old August 17th, 2015, 01:54 PM   #4742 (permalink)
Trading for Fun
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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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Old August 17th, 2015, 03:14 PM   #4743 (permalink)
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Futures Experience: Beginner
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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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Old August 17th, 2015, 11:57 PM   #4744 (permalink)
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Futures Experience: Beginner
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Favorite Futures: options
 
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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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Old August 18th, 2015, 06:53 AM   #4745 (permalink)
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Futures Experience: Intermediate
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Futures Edge on FIO

Are you a NinjaTrader user?

 
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 07:08 AM.
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Old August 18th, 2015, 11:09 AM   #4746 (permalink)
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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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Old August 18th, 2015, 11:17 AM   #4747 (permalink)
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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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Old August 18th, 2015, 02:54 PM   #4748 (permalink)
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Good points. All I know with certainty is that every time I try predicting the future, I'm wrong.

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Old August 18th, 2015, 05:22 PM   #4749 (permalink)
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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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Old August 20th, 2015, 04:31 AM   #4750 (permalink)
Trading for Fun
Riga Latvia
 
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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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