Selling Options on Futures? - Options on Futures | futures io social day trading
futures io futures trading


Selling Options on Futures?
Updated: Views / Replies:694,038 / 6,326
Created: by ron99 Attachments:735

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 735  
 
Thread Tools Search this Thread
 

Selling Options on Futures?

  #4831 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,700 since Jul 2011
Thanks: 781 given, 4,720 received
Forum Reputation: Legendary

ES up 40 points in last hour. 11:30 to 12:30. Crazy.

Reply With Quote
 
  #4832 (permalink)
Market Wizard
Houston, TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 2,025 since Dec 2013
Thanks: 1,678 given, 3,131 received
Forum Reputation: Legendary

And vol has puked back down almost to Friday levels

Reply With Quote
 
  #4833 (permalink)
Trading Apprentice
Boise, ID
 
Futures Experience: Advanced
Platform: Thinkorswim
Favorite Futures: ES
 
Posts: 10 since Feb 2015
Thanks: 7 given, 7 received



ron99 View Post
ES up 40 points in last hour. 11:30 to 12:30. Crazy.

This counter trend rally may not last very long (from a day to a few days) and will very likely be sold by traders. A V-shape recovery like in past few years has a low probability of repeating considering we are just entering the worst season of the year (August, September, and October). We will at least re-test the low of today's historic plunge in coming days or weeks and see where we go from there. I'm going to sell some FOTM ES calls when my technical analysis gives a green light.

Reply With Quote
 
  #4834 (permalink)
10 out of 10
Sacramento, CA
 
Futures Experience: None
Platform: None
Broker/Data: OX and DeCarley
Favorite Futures: Futures options
 
eudamonia's Avatar
 
Posts: 310 since Jul 2010
Thanks: 299 given, 424 received


rsm005 View Post
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.

After the winter NG debacle of 2013/2014 I had a similar experience and similar epiphany. Keep the size small. The strategy (including the ES) works but I was way too large at IM X 3.

This is why we've been discussing in recent months what would happen if you woke up to a 10% ES drop in this thread. Which is pretty close to what we saw intraday today.

Most of us are happy to make 50% per annum but not happy to take a 50% haircut, myself included. Right now I'm trading about 1/3rd the size IM X 9 and will gladly make 16% per year and only suffer 16% haircuts on days like today.

Also, it certainly helps to have strategy diversification and not rely on any one strategy.

Reply With Quote
The following 10 users say Thank You to eudamonia for this post:
 
  #4835 (permalink)
Market Wizard
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
Broker/Data: various
Favorite Futures: futures
 
Posts: 2,362 since Jul 2012
Thanks: 1,111 given, 4,292 received
Forum Reputation: Legendary


hain241 View Post
This counter trend rally may not last very long (from a day to a few days) and will very likely be sold by traders. A V-shape recovery like in past few years has a low probability of repeating considering we are just entering the worst season of the year (August, September, and October). We will at least re-test the low of today's historic plunge in coming days or weeks and see where we go from there. I'm going to sell some FOTM ES calls when my technical analysis gives a green light.

I wish you the best, but the future is a whole lot less certain than your posts make it sound.

If you have any questions please send me a Private Message or use the futures.io "Ask Me Anything" thread
Reply With Quote
The following 6 users say Thank You to kevinkdog for this post:
 
  #4836 (permalink)
Trading for Fun
St Paul, MN, USA
 
Futures Experience: Advanced
Platform: Abacus
Broker/Data: RJO, Interactive Brokers
Favorite Futures: Commodity Futures & Options
 
Posts: 196 since Jan 2014
Thanks: 117 given, 191 received


eudamonia View Post
After the winter NG debacle of 2013/2014 I had a similar experience and similar epiphany. Keep the size small. The strategy (including the ES) works but I was way too large at IM X 3.

Ironically, natural gas has been a decent option selling candidate since late winter/early spring. About 35-40% at the money implied volatility (so you're getting paid for the risk) and a broad trading range suitable for short strangles or ratio sales. All bets are off if it looks like we're going to run out of storage space (increasingly unlikely) or we have a super cold winter (who knows), but on a day like today, it's showing, via a very narrow range, that it is a DOMESTIC commodity, at least for a few more quarters when LNG exports begin.

Reply With Quote
The following 3 users say Thank You to CafeGrande for this post:
 
  #4837 (permalink)
Trading Apprentice
Boise, ID
 
Futures Experience: Advanced
Platform: Thinkorswim
Favorite Futures: ES
 
Posts: 10 since Feb 2015
Thanks: 7 given, 7 received


kevinkdog View Post
I wish you the best, but the future is a whole lot less certain than your posts make it sound.

I agreed to a certain extent. However, human nature never changes, at least that's the cornerstone of technical analysis. We all understand that this is a probability game. No one knows anything for sure, but based on careful analysis and sound risk management, we can still make educated guesses and earn decent $$$ for our work. Again, I'm selling FOTM calls to take advantage of a fragile rebound in coming days. It's not safe to sell a ton of ES puts right now. Fear for the most part is irrational.


Last edited by hain241; August 24th, 2015 at 01:13 PM.
Reply With Quote
 
  #4838 (permalink)
Market Wizard
Houston, TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 2,025 since Dec 2013
Thanks: 1,678 given, 3,131 received
Forum Reputation: Legendary


eudamonia View Post
After the winter NG debacle of 2013/2014 I had a similar experience and similar epiphany. Keep the size small. The strategy (including the ES) works but I was way too large at IM X 3.

This is why we've been discussing in recent months what would happen if you woke up to a 10% ES drop in this thread. Which is pretty close to what we saw intraday today.

It was down as much as 7% for about 10mins most of the time is was down only 5%. Premiums were through the roof, more because of the vol spike (VIX traded 53 vs 28 close) than the price move though. Obviously they come hand in hand though.
V1400P Friday night, 1963.1 underlying, Vol ~ 46% = 3.45.
V1400P Monday, 1870 underlying (Down 4.8%) , Vol unchanged= 5.72
V1400P Monday, underlying unchanged , Vol +17 = 14.00
V1400P Monday, 1870 underlying (Down 4.8%) & Vol +17 = 21

eudamonia View Post
Most of us are happy to make 50% per annum but not happy to take a 50% haircut, myself included. Right now I'm trading about 1/3rd the size IM X 9 and will gladly make 16% per year and only suffer 16% haircuts on days like today.

Also, it certainly helps to have strategy diversification and not rely on any one strategy.

Name of the game is always to survive to fight another day. If your conservative like that you also give yourself lots of room to add positions when something unexpected happens like this AM.

Reply With Quote
The following 2 users say Thank You to SMCJB for this post:
 
  #4839 (permalink)
Market Wizard
Houston, TX
 
Futures Experience: Advanced
Platform: XTrader
Broker/Data: Advantage Futures
Favorite Futures: Energy
 
Posts: 2,025 since Dec 2013
Thanks: 1,678 given, 3,131 received
Forum Reputation: Legendary


kevinkdog View Post
I wish you the best, but the future is a whole lot less certain than your posts make it sound.


hain241 View Post
I agreed to a certain extent. However, human nature never changes, at least that's the cornerstone of technical analysis. We all understand that this is a probability game. No one knows anything for sure, but based on careful analysis and sound risk management, we can still make educated guesses and earn decent $$$ for our work. Again, I'm selling FOTM calls to take advantage of a fragile rebound in coming days. It's not safe to sell a ton of ES puts right now. Fear for the most part is irrational.

Historical statistics mostly seem to say we rally from here - at least in the short/medium term.

Reply With Quote
The following user says Thank You to SMCJB for this post:
 
  #4840 (permalink)
Elite Member
Perth, Australia
 
Futures Experience: Intermediate
Platform: InvestorRT, S5Trader (OEC), Optionvue7
Broker/Data: Stage5 (OEC/GAIN)
Favorite Futures: ES, EW Options on Futures, CL
 
croctrader's Avatar
 
Posts: 6 since Jul 2010
Thanks: 120 given, 9 received



ron99 View Post
/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.

Ditto. to rsm005 and ron99. I'll post a link here in the coming days to a new journal to share my experiences selling options on futures, a trade plan which is based on ron's approach. Like you rsm005, I have had my first losing trade today after several successful months, rather than years, a large enough loss to erase profits to date. Timing is (almost) everything and this has been one of the most difficult aspects for me....when not to re-initiate a trade. I did exit intraday today rather than waiting for overnight settlement, against my plan.... I believe I did the right thing, having not experienced this situation before, markets locked limit down, there was no reasonable probability of me knowing what might happen next, what I did know is market context confirmed as changed (according to my plan) and fear was in the air - in short, number one rule today for me was Capital Preservation.

Reply With Quote
The following 4 users say Thank You to croctrader for this post:

Reply



futures io > > > > Selling Options on Futures?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

FuturesTrader71: TBA

Elite only

Al Brooks: TBA

Elite only

Jigsaw Trading: TBA

Oct 19

RandBots: TBA

Oct 24
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Crude Oil (CL) futures inverse pairing options Big Mike Commodities Futures Trading 8 December 12th, 2013 11:00 AM
Recommend futures, options Broker? sam1197 Reviews of Brokers and Data Feeds 17 March 27th, 2013 12:42 AM
Trading Futures with options as protection Gooffy2010 Commodities Futures Trading 6 October 2nd, 2012 04:55 PM
Selling Njniatrader sam1197 NinjaTrader 22 June 28th, 2012 12:40 PM
Zen-Fire Futures options tici88 Reviews of Brokers and Data Feeds 1 July 30th, 2011 09:16 AM


All times are GMT -4. The time now is 10:53 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-09-21 in 0.08 seconds with 19 queries on phoenix via your IP 54.156.69.204