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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,803 / 5,734
Last Reply:23 Hours Ago (01:01 AM) Attachments:642

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Selling Options on Futures?

Old January 22nd, 2013, 06:36 PM   #531 (permalink)
Trading for Profit
new york
 
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thanks !
shane

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Old January 22nd, 2013, 06:42 PM   #532 (permalink)
Market Wizard
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shanemcdonald28 View Post
thanks !
shane

shane, to keep the thread from getting unwieldy, if you would just click the "thanks" button on my post instead of making a new post to say thanks that would keep the thread shorter and make it easier to read.

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Old January 22nd, 2013, 08:57 PM   #533 (permalink)
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ron99 View Post
Is that at Tradestation or somewhere else? Are your spread trades done in the pit or online? Does Tradestation charge you the 0.10 overnight fee?


With Tradestation, you cannot do spread trades on the main platform (unless you leg them in). You also cannot access the exchange spread quotes via the main platform (meaning, you can backtest them, chart them, etc.). Every time I ask, Tradestation says they have no plans to offer these quotes/trading.

BUT...

If you open another Tradestation account, and ask to trade the Futures 4.0 platform, you get free exchange spread quotes, bare bones charts and no .10 overnight fee. The drawback is that the platform is probably late 90s vintage (I remember beta testing Lind Waldock's in the late 90s, and it was better than this). Speed traders will find this platform unacceptable. Swing traders like me can deal with it.

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Old January 22nd, 2013, 09:07 PM   #534 (permalink)
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MJ888 View Post
Seasonal Overview | Signal Financial Group

Hey guys check out this link for seasonal charts. It seems Signal charts are more up to date than the CSS charts.

Good link, thanks ! There's even more than seasonal charts in there.

As of Cordier Newsletter, I received it as well, and it doesn't look much like a safe bet

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Old January 24th, 2013, 02:20 PM   #535 (permalink)
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Options on futures

Futures Edge on FIO

Are you a NinjaTrader user?

 
Hey everyone, Im new here and it's a pleasure to see so much interest in trading. My question regards options on futures commodities. I've read James cordier option selling which was a very interesting read, however I was wondering if anyone could decipher the myths from reality. The returns seem to be very good I just want to know if anyone can give any insight the good and the bad and what is a reasonable return, cause as is the case it's never what it seems thanks

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Old January 24th, 2013, 02:35 PM   #536 (permalink)
Market Wizard
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Hi Selim,

I had an account at Liberty Trading for 3 years. The ROI% after his fees (30-40%) were
2009 98.8%
2010 25.2%
2011 -28.6%

So they go from very good to bad. I quit having an account there because every year I had a better return then he did.

If you check earlier posts in Dec, other posters posted their returns.

The number one thing is to stay far out of the money (OTM). I use a delta of <0.0300. Some do higher but you definitely want to stay below 0.1000.

Number 2 thing is have plenty of excess cash in your account. I use 66% cash and 33% covering Initial Margin. This allows you to ride out temporary movements against your position. The worst thing is to have to bail out of a position only to have it be a profitable position if you stayed in. But there are some positions because of a change fundamentals or other reasons you will have to bail. Knowing when to bail is the hardest part of trading.

Feel free to ask other questions here.
Ron

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Old January 24th, 2013, 02:46 PM   #537 (permalink)
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Options

I really like the fast responses. Ron99 what were the reasons 2011 was a negative year, the previous years were stellar did you sell below delta < 0.1 in 2011 or were you more aggressive since you were doing so well the previous years.

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Old January 24th, 2013, 03:09 PM   #538 (permalink)
Market Wizard
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Selim View Post
I really like the fast responses. Ron99 what were the reasons 2011 was a negative year, the previous years were stellar did you sell below delta < 0.1 in 2011 or were you more aggressive since you were doing so well the previous years.

Those were the trading results of James Cordier, not me. When you have an account with him he does all of the trades. You are just along for the ride.

He sold options that when I saw what he did I said to myself, why on earth did he do that. In my own accounts I rarely had on the same positions he did. I made 111.7% in 2011.

For example, Jan 2011 he did oil ratios (I dislike them. They take more fees and don't seem to reduce risk. And he had to bail on them anyway.).

Too close to ITM. He sold 138 calls when oil was 100 and headed to the seasonal first four month rise in prices. He then held onto the puts when oil crashes in May, reducing his profit.

Too far out in time, he did Oct contracts in Jan. Which gives you too high a delta. I don't know what it was then. He had to bail out on the calls. Later he had to bail out on the puts. Net he lost money on the strangles.

On 1/14/11 he bought 1 Oct CL 133 call for 0.86 and sold 3 138 calls for 0.55. He could have made 790. He lost 3660 on them. He got out of the 133 at 3.05. He got out of the 138s at 2.50.

On 1/14/11 he bought 1 Oct CL 66 put for 0.87 and sold 3 61 puts for 0.55. He made 340 on them. He got out of the 66 put at .25. He got out of the 61 puts at .23.

On 1/19/11 he added another set of them. He lost 2580 on those.

Most of Cordier's generals ideas are correct. His execution of them was poor in 2011.


Last edited by ron99; January 24th, 2013 at 03:30 PM. Reason: Added info
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Old January 24th, 2013, 03:58 PM   #539 (permalink)
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Wow

Ron99 I think you are just really good at this it must be an innate talent, were you an institutional trader before trading on your own? Man I have questions but I feel I'm intruding on your time I hope you don't mind me picking your brain??? First and foremost thanks for the prompt response. First question has any of your selling option gone in the money even after you bought it back at a loss. Are you a net seller of options do you buy just to hedge. And last but not the last what advice, trading advice would you give to a newbie like myself what should I aim for ie cash on reserve etc. Ron99 must stand for 99% Ron will make you money. I think I'm a bit too excited thanks dude, dude is very American right?

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Old January 24th, 2013, 04:24 PM   #540 (permalink)
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Such great advice Ron, you have drummed into me sooooooo many times that keeping the delta low and always having 66% excess cash being two of the most important factors to adhere to but i never tire of it being reinforced. Take note of this Selim, at first it might seem like you are too far OTM and the premium is too low, but the margin is correspondingly lower so the return on funds invested (margin + excess) is still healthy and you will find you have to bail on less postitions making for better long term returns, its about small steady accumulations, not trying to hit home runs.

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