(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 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 dont 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.
Here is a long term study using one short 5.00 delta and two long 1.50 delta options same month as the short and exiting at 50% drop.
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).
It just missed hitting the 50% drop and exiting on 8/17/15 by 0.05. So 8/24/15 happened when the options were down to 52 DTE. They just went on margin call by 6%.
But even with that losing day the spreads are up 83.8% for the 2 1/2 year study. They are only down 6.7% for 2015. That is far better than the naked options.
The following 20 users say Thank You to ron99 for this post:
On 11/03 I decided to create a bull call calendar spread on Lean Hogs (in the hope for quick short reverseal):
* HE G6 C 68 1.65 and HE Z5 +1.35 (120$ credit)
On 11/05 I closed:
* HE G6 C 68 + 0.825 and HE Z5 1 (70$ credit)
P/L = 190$ per position - commissions
I don't understood: how could this spread to bring a profit while HE futures continue to drop?
Hi Ron,
Thanks for your backtesting of new strategy of 1 short+ 2 longs with reference to your post #5101. This backtesting shows that it can work in spite of loss on 8/25/15 which can be absorbed by the profits of other trades to give your overall profit. I have a question regarding this loss in trade number 32 which is -366.
1. Is this loss when exit is based on the condition of New Margin+(New price- initial price) >= 3X IM or just exiting on 8/25 when price has moved too much?
2. Could you have exited earlier based on New Margin+(New price- initial price) >= 3X IM or there was no opportunity to exit earlier and it had to be exited on 8/25?
Regards.
It looks like you did an excellent job of getting filled on your trade.
On 11/03 you sold the 68 call for 1.65 but it settled at 1.25. A 0.40 difference. While your long you bought at 1.35 and it settled at 1.225. A 0.125 difference. The settlement for the spread was -0.025. So you were up 0.275 the first day's settlement.
On 11/05 you traded out of the spread at -0.175 while it settled at +0.025. A difference of 0.200.
The spread made $20 based on settlements but you made $190 because both days you traded at a better price than the settlement.
If you had entered this spread on 10/20 you would have lost a lot of money in 2 weeks. The value of your long decreased faster than the short. This is what you were expecting for your trade.
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).
The following 4 users say Thank You to ron99 for this post:
The migration of options markets to the electronic screen for execution has increased in recent years, with over 50% of options now traded electronically. The use of Request for Quotes (RFQ) has played a key role in enabling that transition to occur by allowing traders to electronically execute multi-leg and hedged options strategies.
I trade very few options (at least compared to futures), but I do use strategies and RFQs mostly for verticals and horizontals to roll positions.
Today I was looking to executing both a ES horizontal and a ES vertical+horizontal spread. The 2 way on the X2050/Z2050 call horizontal was 50 points wide, and the 2 way on the X2050/Z2100 vertical+horizontal call spread was 100 points wide. When you combine them the 2 way would be 150 points wide.
After reading @mattz post yesterday I decided to combine them into one structure (+2 X2050C, -1 Z2050C, -1 Z2100C). When I issued the RFQ I wasn't surprised to get a 2 way 125 points wide, encouraging you to trade the larger product but still maintaining their pound of flesh margin. What did surprise me though was that when I entered the order in the middle I was filled instantly. Examining the fill prices I was filled at the midpoint of each individual spread. Not sure if this was just luck on my behalf or something that maybe others can expect.
This also highlights that often there is hidden liquidity in quotes, (especially in markets where the 2 way is competing market makers) and just clicking on the bid or ask is a market makers dream.
Last edited by SMCJB; November 12th, 2015 at 01:19 PM.
Reason: replaced XZ ZA ZB with X2050C, Z2050C & Z2100C to reduce confusion.
The following 6 users say Thank You to SMCJB for this post:
Not luck, but you went about it the smart way. IMHO, options are over priced for buyers and under priced for sellers, so the fact you have received the mid point just shows you are flexible the market makers could be on this.
Remember, many options are a hedging tool for grain operators, funds, refineries, and they pay "Ask" because they have a larger interest at play. As a speculator, you can be a lot more flexible and patient.
Thanks,
Matt
Optimus Futures
There is a substantial risk of loss in futures and options trading. Past performance is not indicative of future results.
PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
The following 4 users say Thank You to mattz for this post:
