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Selling Options on Futures?
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Selling Options on Futures?

  #491 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
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psears View Post
Hey Ron99 and anyone else who is doing this full time,

I was wondering how big of a bank roll one would likely need to be able to do this full time and make $100,000/yr.

Also wondering if anyone thinks a hedge fund could could be started based on selling OTM options as is discussed here?

Thanks!

Take $100,000 divided by your expected yearly ROI%.

For example, if you expect to make 20%
100,000 / .20 = 500,000

You need at least a 3 year track record of trading before you should even think of quiting your job and doing this full time.

Sure a hedge fund could be started that trades OTM options. But the time, paperwork and money it costs are far more than you think.

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  #492 (permalink)
Trading Apprentice
paris france
 
Futures Experience: Intermediate
Platform: IB tws
Favorite Futures: index futures
 
Posts: 11 since Dec 2012
Thanks: 4 given, 2 received


MJ888 View Post
Yeah, I am delighted too and didn't think OX would go that low. But I did start the conversation by telling them that I only pay a flat rate of $2.32 at IB and that is also inclusive of all fees and paying $12.99 plus fees is unjustified no matter how great the services were at OX. They put me on hold for a few minutes and then came back with $3.99 no strings attached. I am glad I asked.


Hello

I trade through IB and am pretty satisfied overall with their service , but the margin issue can become a serious matter, especially coupled with IB autoliquidation policy.

Are you sure that the fee you got from OX is including exchange fees as IB fee for futures and options is 0.70ct per contract + exchange fees and +- rebates ?

Also, this thread is about fotm strikes, but does anyone know how far are margin requirements between IB and OX on atm and slightly otm strikes ?

Thanks
marc

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  #493 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
Broker/Data: Options Express
Favorite Futures: Options on Futures
 
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Posts: 165 since Sep 2012
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marcl View Post
Hello

I trade through IB and am pretty satisfied overall with their service , but the margin issue can become a serious matter, especially coupled with IB autoliquidation policy.

Are you sure that the fee you got from OX is including exchange fees as IB fee for futures and options is 0.70ct per contract + exchange fees and +- rebates ?

Also, this thread is about fotm strikes, but does anyone know how far are margin requirements between IB and OX on atm and slightly otm strikes ?

Thanks
marc

The commission rate from OX DOES NOT include exchange fees. Which is okay with me. With drastically lower margins, I can easily make up the difference.

I like the IB platform a lot. It is faster than OX. But for my purposes of writing far OTM options, OX will be fine. I WOULD NOT suggest using OX to day trade stocks or futures, for that I would recommend IB.

As for your last question, I would have to compare positions using IB and OX to see the difference in margin requirements. Maybe others here can help with that too.

MJ888

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  #494 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,720 since Jul 2011
Thanks: 792 given, 4,763 received
Forum Reputation: Legendary


marcl View Post
Hello

I trade through IB and am pretty satisfied overall with their service , but the margin issue can become a serious matter, especially coupled with IB autoliquidation policy.

Are you sure that the fee you got from OX is including exchange fees as IB fee for futures and options is 0.70ct per contract + exchange fees and +- rebates ?

Also, this thread is about fotm strikes, but does anyone know how far are margin requirements between IB and OX on atm and slightly otm strikes ?

Thanks
marc

Pick a couple of options and give us the IB margin on them. I will then tell you SPAN and OX margin for them.

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  #495 (permalink)
Trading Apprentice
paris france
 
Futures Experience: Intermediate
Platform: IB tws
Favorite Futures: index futures
 
Posts: 11 since Dec 2012
Thanks: 4 given, 2 received

For selling ES options, IB shows :

Put 1470 :

Feb 423
March 439
Dec 2013 3327

Put 1440 :
Feb 228
March 439
Dec 2013 9803

call 1470:
Feb 6445
March 6225
Dec 13 10206

Call 1500
Feb 6109
March 5933
Dec 13 9803

SPY is worse btw, although I just check dec 2013 calls

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  #496 (permalink)
Trading Apprentice
paris france
 
Futures Experience: Intermediate
Platform: IB tws
Favorite Futures: index futures
 
Posts: 11 since Dec 2012
Thanks: 4 given, 2 received

I don't think the above info is much usable, it shows the margin impact to my account, which already has a bunch of ES options positions open and is quite short delta at the moment (Jan 18 to March 15th expiry), hence the lower margin impact of short puts.

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  #497 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
Broker/Data: Options Express
Favorite Futures: Options on Futures
 
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Posts: 165 since Sep 2012
Thanks: 37 given, 123 received

Yeah, useless cause if you have on existing ES positions, it will be a little bit hard to tell the margin needed.

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  #498 (permalink)
Trading Apprentice
paris france
 
Futures Experience: Intermediate
Platform: IB tws
Favorite Futures: index futures
 
Posts: 11 since Dec 2012
Thanks: 4 given, 2 received

Checked through another account, which doesn't hold any es position :

All initial margins, maintenance is 20% less :

Put 1470

feb 6523
march 6535
march 6315

1440 put
feb 6167
march 5957
dec 9849 (system gives as well, 3941 only as maintenance margin, not sure that's right)

Calls margin requirements are roughly the same as before, and as well as for puts, maintenance margin is much lower than the initial margin for dec calls

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  #499 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
Broker/Data: Options Express
Favorite Futures: Options on Futures
 
MJ888's Avatar
 
Posts: 165 since Sep 2012
Thanks: 37 given, 123 received

I quickly compared the margin needed on IB and OX for one put:

Feb ES 1470 Put: IB Initial: $6,535 Maint: $5,228 OX Initial: $3,489 Maint: $3,172

March ES 1470 Put: IB Initial: $6,315 Maint: $5,052 OX Initial: $3,351 Maint: $3,047

Dec ES 1470 Put: IB Initial: $10,313 Maint: $4,219 OX Initial: $4,443 Maint: $4,039

Not going to do the rest cause it's pretty clear to me that OX has much more favorable margin requirements.

MJ888

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  #500 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
Broker/Data: Options Express
Favorite Futures: Options on Futures
 
MJ888's Avatar
 
Posts: 165 since Sep 2012
Thanks: 37 given, 123 received


For ES specifically, I have found margins on calls to be higher on IB.

MJ888

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