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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 September 4th, 2015, 09:08 PM   #4971 (permalink)
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Anyone else try trading /CL last 2 days? It seemed like the B/A spreads were wider than usual.

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Old September 5th, 2015, 12:39 AM   #4972 (permalink)
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Chubbly View Post
Anyone else try trading /CL last 2 days? It seemed like the B/A spreads were wider than usual.

CL rolls every month are you sure you're looking a front month which is October? Tightest bid ask spreads with all the volume in front month.
Ron

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Old September 5th, 2015, 08:51 AM   #4973 (permalink)
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Blash View Post
CL rolls every month are you sure you're looking a front month which is October? Tightest bid ask spreads with all the volume in front month.
Ron

I was looking a bit farther out at the Nov-Jan months but at 10-15 delta. I just noticed the OVX (CBOE CRUDE OIL VOLATILITY) was spiking up at 74 which is extremely high.

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Old September 5th, 2015, 03:27 PM   #4974 (permalink)
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I was looking a bit farther out at the Nov-Jan months but at 10-15 delta. I just noticed the OVX (CBOE CRUDE OIL VOLATILITY) was spiking up at 74 which is extremely high.

On 08/31/15 I bought some NOV CL PUTS at 0.49. I expect the CL to drop to 30 in 1 month.

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Old September 5th, 2015, 05:22 PM   #4975 (permalink)
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Chubbly View Post
I was looking a bit farther out at the Nov-Jan months but at 10-15 delta. I just noticed the OVX (CBOE CRUDE OIL VOLATILITY) was spiking up at 74 which is extremely high.

I'm not sure if that's a good quote. I know it's a 'print' but a spike to that level did not occur in $OIV. If you're trading CL futures options, I think $OIV is the better indicator to keep an eye on.

There are similar unlikely jabs up and down in the corn, soy, and wheat indices that use the VIX method. They really junk up a chart so I tend to chart them using a settlement line rather than H-L-C.

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Old September 5th, 2015, 06:08 PM   #4976 (permalink)
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CafeGrande View Post
I'm not sure if that's a good quote. I know it's a 'print' but a spike to that level did not occur in $OIV. If you're trading CL futures options, I think $OIV is the better indicator to keep an eye on.

There are similar unlikely jabs up and down in the corn, soy, and wheat indices that use the VIX method. They really junk up a chart so I tend to chart them using a settlement line rather than H-L-C.

Ok thanks, that makes more sense. On Aug 31 my chart shows OVX opened at 52 went up spiked at 74 then closed at 49


Last edited by Chubbly; September 6th, 2015 at 01:03 AM.
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Old September 5th, 2015, 08:32 PM   #4977 (permalink)
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Hills View Post
On 08/31/15 I bought some NOV CL PUTS at 0.49. I expect the CL to drop to 30 in 1 month.

IMHO you should never ever buy options. If bullish sell puts if bearish sell calls. 75-80% of options expire worthless meaning you keep the premiums you collected upon shorting a put or call in most cases. Selling options puts time decay in your favor instead of against you as when buying. Yes naked short options in theory have unlimited risk but this just means you have to control risk yourself. Just like I'm sure you already do when you go long or short in the underlying. And in doing so you are granted very favorable probabilities by taking care of risk yourself.

Spreading options with short Ratio Credit Spreads (3:1) will increase your odds as well as.

Ron

Doubt kills more dreams than failure ever will. Perfect: the enemy of Done. per·fec·tion·ist: ultimately one lacking self-confidence

Quoting 
The steed of this Valley is patience; without patience the wayfarer on this journey will reach nowhere and attain no goal.

Buy Low And Sell High (read left to right or right to left....lol)
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Old September 5th, 2015, 08:58 PM   #4978 (permalink)
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IMHO you should never ever buy options. If bullish sell puts if bearish sell calls. 75-80% of options expire worthless meaning you keep the premiums you collected upon shorting a put or call in most cases. Selling options puts time decay in your favor instead of against you as when buying. Yes naked short options in theory have unlimited risk but this just means you have to control risk yourself. Just like I'm sure you already do when you go long or short in the underlying. And in doing so you are granted very favorable probabilities by taking care of risk yourself.

Spreading options with short Ratio Credit Spreads (3:1) will increase your odds as well as.

Ron

I highly disagree. There is a time and place for buying options. I have made thousands buying options. You just have to time them more perfectly. The ROI on them can be huge. And the limited risk is a large reason to do them.

But you just don't do them as a blanket strategy. You have to pick and choose your spots wisely.

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Old September 5th, 2015, 11:34 PM   #4979 (permalink)
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ron99 View Post
I highly disagree. There is a time and place for buying options. I have made thousands buying options. You just have to time them more perfectly. The ROI on them can be huge. And the limited risk is a large reason to do them.

But you just don't do them as a blanket strategy. You have to pick and choose your spots wisely.

That's wonderful you have that opinion @ron99 disagree all you want it's healthy. Only from the clash of differing opinions comes the spark of truth. And as I said IMHO. I think the net sellers win in the options game as a general rule again IMHO the stats tend to bare that out. You have much more experience than I. Trading is a very personal endeavor for sure.

I've had $25k made for me by a CTA 40 yr floor trade veteran Harvey Paffenroth as a very patient net seller of options on futures only to have another 2 CTA traders, who shall remain nameless and not very patient, around the same time lose that profit down to just under $7k in option trading. Each tying up $60k and $75k. Moral of the story net selling in no way guarantees anything....and nobody is better at trading your cash than you. As I see it patience is the most important aspect of trading. But takes a level of maturity that escapes most. Selling and waiting can be difficult.

I love the name of this thread especially the question mark......

Ron

Doubt kills more dreams than failure ever will. Perfect: the enemy of Done. per·fec·tion·ist: ultimately one lacking self-confidence

Quoting 
The steed of this Valley is patience; without patience the wayfarer on this journey will reach nowhere and attain no goal.

Buy Low And Sell High (read left to right or right to left....lol)
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Old September 6th, 2015, 04:41 AM   #4980 (permalink)
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Blash View Post
That's wonderful you have that opinion @ron99 disagree all you want it's healthy. Only from the clash of differing opinions comes the spark of truth. And as I said IMHO. I think the net sellers win in the options game as a general rule again IMHO the stats tend to bare that out. You have much more experience than I. Trading is a very personal endeavor for sure.

I've had $25k made for me by a CTA 40 yr floor trade veteran Harvey Paffenroth as a very patient net seller of options on futures only to have another 2 CTA traders, who shall remain nameless and not very patient, around the same time lose that profit down to just under $7k in option trading. Each tying up $60k and $75k. Moral of the story net selling in no way guarantees anything....and nobody is better at trading your cash than you. As I see it patience is the most important aspect of trading. But takes a level of maturity that escapes most. Selling and waiting can be difficult.

I love the name of this thread especially the question mark......

Ron

I have been using Ron's strategy for a while till 2 weeks ago (as many guys here). I preferred to close my positions 2 days before black monday and saved a lot of money. I just lost 10% of my account. Now I am pretty sure we should wait at least 1 year to continue using it. My vision is bullish.

On the other hand, if you risk 1% of your account in a trade buying options, and you thinkmyou can make 30-50% of profits, why not to try? In my case, if CL starts its final capitulization I thinkmwe can see it at 30$ or less. My Nov CL 39 options could settle at 9. I bought them at 0,49. It's 18 times my investment. I think it makes sense that trade.

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