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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:567,835 / 5,727
Last Reply:9 Hours Ago (12:40 PM) Attachments:642

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Selling Options on Futures?

Old August 24th, 2015, 11:41 AM   #4821 (permalink)
Market Wizard
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I am out of all short options. I still have the long 1500s on. I'm guessing another drop sometime today.

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Old August 24th, 2015, 11:43 AM   #4822 (permalink)
Market Wizard
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grausch View Post
"The market can stay irrational for longer than you can stay solvent."

This quote needs to be on every trader's home screen reminding him/her everyday.

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Old August 24th, 2015, 11:43 AM   #4823 (permalink)
Trading for Fun
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SMCJB View Post
When ES was down on its lows ~ 1830/1840 ~ V wing vol was +20 ish and X wing Vol was +17 ish.
With ES back to ~ 1900, V wing vol is +12 ish and X wing Vol was +10 ish.

Do you have a hard definition for a wing, or is it anything below 10 delta, 5 delta, something like that?

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Old August 24th, 2015, 11:47 AM   #4824 (permalink)
Market Wizard
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CafeGrande View Post
Do you have a hard definition for a wing, or is it anything below 10 delta, 5 delta, something like that?

I do not. I was watching the V and X 1250-1450 Puts.

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Old August 24th, 2015, 12:10 PM   #4825 (permalink)
Trading Apprentice
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Futures Edge on FIO
My broker is Tradestation and today I wasn't able to trade ES options. I saw Options of ES DTE 98 strike 1100, delta 0.03 at 7! There was no liquidity

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Old August 24th, 2015, 12:27 PM   #4826 (permalink)
Market Wizard
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For the VIX followers.

Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).

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Old August 24th, 2015, 12:30 PM   #4827 (permalink)
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ron99 View Post
My IMx3 spreads have hit exit point. I will exit when I see market start to drop again.

My IMx4 spreads are not at exit point at 10:15 am (ignoring craziness from 9:10 am to 9:40 am). But drawdown is 47%. I will probably exit these today too.

I suspect margin calls tomorrow will send another wave of selling.

After this is over we need to research ways to limit losses better. Selling futures? Just getting out at any sign of trouble? Find another way to invest money

I am seriously troubled by what the markets have become because of algo trading.

I wanted to post a quick update this morning now that I've had a chance to get a good nights sleep as well as talk things through with my wife and have a long hard discussion with one of my best friends that's guided me in this process.

1. The total drawdown on my account as of close was 51%. If the buyback was executed instantly when I hit the "oh shit" button the drawdown would have been closer to 42% but the market makers would keep pulling the ask. I had to chase it for almost 10%.

2. Even with the drawdown I'm considered lucky. Right after I got filled the bid/ask soared and I'd have been completely wiped out.

3. The person that started me in options trading sat me down and repeated smacked me in the head after hearing what happened. He got slammed last week also but isn't sweating it as badly as me for a completely different set of reasons. This is the original trading method we used...and what he still does.
a. sell puts on SPY, AAPL, FB, FEYE, NOW, PANW, or NMBL stocks. Growth companies effectively.
b. sell close to the money and use weekly, bi-monthly, or monthly contracts
c. NEVER use leverage. If the price falls you have enough cash to cover the assginment
d. determine the exit if assigned. either sell the asset instantly and sell more puts or sell covered calls or just hold until the market rebounds.
e. the object is to make enough money to augment my lifestyle and get me out of the fear of losing income if ii lost my job. along with that build wealth by buying assets that I'm bullish on at a discount
4. As of now I'm pretty much done with the futures market. I may come back but today I'm going back to SPY and the stocks listed above, I pretty much have to. What makes me more comfortable with the method described in step 3 is that I own an asset that I'm long term bullish on and can switch methods of trading quickly. Maybe that's the way to manage the risk better that you were hinting at Ron. I'll recover, I have a good paying job and don't plan on retiring this lifetime, and in the end the money represented a small-ish portion of my total equity holdings. Although this route is having a bigger impact on that...but that's a 5 year+ hold.

5. If all of you and the mod allows I'll keep posting trades on this thread when I regroup. I know it won't be options on futures but it's a pivot and may represent a hedging or alternate method of trading for some. I'm going back to OX because decarley can't trade stocks or ETFs.

/rsm005/


Last edited by rsm005; August 24th, 2015 at 12:44 PM.
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Old August 24th, 2015, 12:45 PM   #4828 (permalink)
Market Wizard
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/rsm005/ sounds like you need to start a trading journal at Big Mike's. I'd prefer you not post stock trades here. The thread is too long and overwhelming to people new to the thread.

You could post a link to it here when you start it.

Timing is everything. Unfortunately you hit the big loss right after you started. I'm still profitable ES selling options.

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Old August 24th, 2015, 12:54 PM   #4829 (permalink)
Trading for Fun
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rsm005 View Post
a. sell puts on SPY, AAPL, FB, FEYE, NOW, PANW, or NMBL stocks. Growth companies effectively.
[INDENT]

/rsm005/

(Note: A single post in response to to RSM005; I won't post additional equity option things here)

Please keep in mind that a couple of the names you've listed are "trading vehicles" just like the S&P 500 and subject to much the same algo, HFT, stupid hedge funds, name your demon, in addition to company-specific risk. I have not confirmed the values in the table below on the CBOE site, but check out the implied volatility high and range for Apple today. A peak of 90% vs. 52% for S&P 500 VIX. Take some time, make sure you really understand IV and greek risk or you might be jumping from the frying pan and into the fire. Best wishes.

In order: Apple, Amazon, Google, Goldman Sachs, IBM.

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Old August 24th, 2015, 01:16 PM   #4830 (permalink)
Silver bullet
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Hills View Post
My broker is Tradestation and today I wasn't able to trade ES options. I saw Options of ES DTE 98 strike 1100, delta 0.03 at 7! There was no liquidity

in the pre-market (at midnight GMT+1) and a few hours later it was possible (for me though IB) with incredible premiums far OTM even with expiry on the 31st of August worth it. But one has to be very careful (!) entering the market in such an environment. Even though this might be a huge dip in just a few days this isn't over yet and better prepare for a second big wave down the next weeks

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