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


Selling Options on Futures?
Updated: Views / Replies:641,148 / 6,067
Created: by ron99 Attachments:699

Welcome to futures io.

Welcome, Guest!

This forum was established to help traders (especially futures traders) by openly sharing indicators, strategies, methods, trading journals and discussing the psychology of trading.

We are fundamentally different than most other trading forums:
  • We work extremely hard to keep things positive on our forums.
  • We do not tolerate rude behavior, trolling, or vendor advertising in posts.
  • We firmly believe in openness and encourage sharing. The holy grail is within you, it is not something tangible you can download.
  • 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, and we will never resell your private information.

-- Big Mike

Reply
 699  
 
Thread Tools Search this Thread
 

Selling Options on Futures?

  #5121 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 217 since Jan 2015
Thanks: 13 given, 175 received


ron99 View Post
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.

Ron,

Awesome work and thank you for the continued effort. Quick question, does it make sense here to go out further in time from 95 days to say 130? I seem to recall a post by you saying you'd need to go further out in time than 95 days to offer the best protection but can't recall.

Thanks,
/rsm005/

Reply With Quote
 
  #5122 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,565 since Jul 2011
Thanks: 737 given, 4,400 received
Forum Reputation: Legendary


rsm005 View Post
Ron,

Awesome work and thank you for the continued effort. Quick question, does it make sense here to go out further in time from 95 days to say 130? I seem to recall a post by you saying you'd need to go further out in time than 95 days to offer the best protection but can't recall.

Thanks,
/rsm005/

You're welcome.

The problem with going out to 130 DTE is that sometimes that contract isn't available. The non-quarterly months (Serial Months) have 3 months trading at all times. Right now they are Jan, Feb and Apr. May won't start trading until the Tuesday (Monday is a holiday) after the Jan contract goes off on 1/15/16. So that contract would start trading at 123 DTE.

I tried finding a post that I mention being even further out but I couldn't find it.

Here is a post of yours mentioning 130 DTE.
https://futures.io/options-cfd-trading/12309-selling-options-futures-472.html#post511630

Reply With Quote
 
  #5123 (permalink)
Trading Apprentice
Singapore
 
Futures Experience: Beginner
Platform: Ninjatrader
Favorite Futures: ES
 
Posts: 24 since May 2015
Thanks: 6 given, 13 received

Ron's post #5115


Thanks, Ron for your post #5115 of KC trade. I refer to your comment in this post given below:

"Since I put on this spread I found out through further research that the longs need to be less DTE, around 40-70 DTE, to get better coverage during a flash move. Like a 30 point move up in 10 days."

Are you referring to KC only or ES as well? Your latest study on ES is:nselling 1 short and 2 longs at about 95DTE. Are you saying the longs have to be 40-70 DTE. If so, how will you decide between 40 to 70 DTE as your credit will also go down?

Regards,
Dilip

Reply With Quote
 
  #5124 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,565 since Jul 2011
Thanks: 737 given, 4,400 received
Forum Reputation: Legendary


dvbattul View Post
Thanks, Ron for your post #5115 of KC trade. I refer to your comment in this post given below:

"Since I put on this spread I found out through further research that the longs need to be less DTE, around 40-70 DTE, to get better coverage during a flash move. Like a 30 point move up in 10 days."

Are you referring to KC only or ES as well? Your latest study on ES is:nselling 1 short and 2 longs at about 95DTE. Are you saying the longs have to be 40-70 DTE. If so, how will you decide between 40 to 70 DTE as your credit will also go down?

Regards,
Dilip

That is for KC trades. For ES trades the longs should be the same month as the short.

Reply With Quote
The following 4 users say Thank You to ron99 for this post:
 
  #5125 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 217 since Jan 2015
Thanks: 13 given, 175 received

Ron,

Do you deliberately diversify your positions now or are you still heavily favored to ES?

/rsm005/

Reply With Quote
 
  #5126 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,565 since Jul 2011
Thanks: 737 given, 4,400 received
Forum Reputation: Legendary


rsm005 View Post
Ron,

Do you deliberately diversify your positions now or are you still heavily favored to ES?

/rsm005/

Right now I am in a milk trade so not many short options. But I will still heavily favor ES but have some other commodities as fundamentals, seasonals, and ability to protect against flash movements dictate. I will not enter a naked short option anymore.

Right now I have on ESg6p1650-ESg6p1400 (2 longs) that I entered on 10/29/15 at 2.75. 32 days held. Current price is 72% of starting price. It's not going to be very good ROI because of the amount of days held. But it was able to ride out the dip in Nov easily.

I'm thinking of closing it out before Fed mtg on Dec 16th and entering lightly some new positions right before mtg. If it flash crashes then I will make money.

Reply With Quote
The following 6 users say Thank You to ron99 for this post:
 
  #5127 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 217 since Jan 2015
Thanks: 13 given, 175 received

Ron,

Can you share what your IM went to during the drop in Nov? How high did the premium rise?

Thanks,
/rsm005/

Reply With Quote
 
  #5128 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,565 since Jul 2011
Thanks: 737 given, 4,400 received
Forum Reputation: Legendary


rsm005 View Post
Ron,

Can you share what your IM went to during the drop in Nov? How high did the premium rise?

Thanks,
/rsm005/

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

Reply With Quote
The following 5 users say Thank You to ron99 for this post:
 
  #5129 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 217 since Jan 2015
Thanks: 13 given, 175 received

Thanks. It's so strange to see the IM balance and drawdowns higher for the spread vs the naked position.

/rsm005/

Reply With Quote
 
  #5130 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,565 since Jul 2011
Thanks: 737 given, 4,400 received
Forum Reputation: Legendary



rsm005 View Post
Thanks. It's so strange to see the IM balance and drawdowns higher for the spread vs the naked position.

/rsm005/

The spread has a much lower IM and thus less excess. But the differences aren't that great.

Reply With Quote

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)

FIO Journal Challenge featuring NinjaTrader ($2,000+ of prizes)

May

An overview of volumetric analytical tools w/Sergey Sokolov @ PTMC

Elite only

John Hoagland (TBA)

Elite only

FuturesTrader71 Extended Ask Me Anything (AMA)

Elite only

Pete @ Jigsaw Trading (TBA)

Elite only

John @ No BS Day Trading (TBA)

Elite only

An Afternoon with FIO member Softsoap (being rescheduled)

Elite only
     

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 12:40 AM.

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 2017-05-27 in 0.12 seconds with 20 queries on phoenix via your IP 54.224.200.104