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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,198 / 5,728
Last Reply:December 6th, 2016 (05:26 PM) Attachments:642

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Selling Options on Futures?

Old June 1st, 2016, 06:58 PM   #5391 (permalink)
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@ron99 , my memory is your noting (a few months ago I think) that the ratio spread you evolved for the ES to hedge a flash crash would not work for commodities.

My understanding for your latest on the ES was:
DTE ~ 100-120.
Short one @ 5 to 8 delta.
Buy two 1.5 delta @, targeting a net delta of 2 to 3.5.
Exit after 30 days or <80 DTE.

If I've got all of the above correct I wondered why it would not be as effective for a commodity? Am still in early stages of option education. Most all of my ES trades per the above have been positive.

Thanks for all you've contributed.

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Old June 1st, 2016, 07:29 PM   #5392 (permalink)
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kevinkdog View Post

It was good well it lasted, can't wait to hear the comments from Sosnoff. This better not get scooped under the rug....

"Free markets work because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or incentives for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can"
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Old June 1st, 2016, 07:52 PM   #5393 (permalink)
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Neo1 View Post
It was good well it lasted

Who knows it could have actually been bad from day 1.

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Old June 2nd, 2016, 12:48 AM   #5394 (permalink)
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Neo1 View Post
It was good well it lasted, can't wait to hear the comments from Sosnoff. This better not get scooped under the rug....

I'm sure he will not say anything since it's "legal issue" now.
If anyone following from beginning, Sosnoff already said too much risk for his money.

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Old June 2nd, 2016, 01:00 AM   #5395 (permalink)
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Futures Edge on FIO

rsm005 View Post
All,

I'm finding exiting a strangle to be a very annoying process, it's difficult to know exactly how much profit I'm going to pull out of a trade because of the way the long position decays. With that said, I'm wondering if it's possible to know the price of one option by simply knowing the price of another. For example

I sell to open a p1600 for $8
I buy to open a p1300 for $3

If the p1600 drops to $4 in 20 days, what will the price of the p1300 be? Is there a way to know this before entering a trade?

Thanks
/akr/

I use the TOS platform and I assume they use the black sholes model to calculate the values.
You can set the date, vol. etc... and TOS platform will give you the "Theo" price for each option.
If you don't have TOS than maybe Dough can do it or just a google search for black sholes calculator.

hope this helps,

atata

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Old June 2nd, 2016, 02:11 AM   #5396 (permalink)
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kingfish88 View Post
I'm sure he will not say anything since it's "legal issue" now.
If anyone following from beginning, Sosnoff already said too much risk for his money.

I started watching tastytrade after watching a Karen video, I'd say a lot of "tastytraders" started out the same way. The Karen videos have drawn far more attention than any of their other content. 3 out of their top 5 most viewed Videos are staring Karen! SOS must have had an inkling of what was going on, he said he used to monitor her trades when he was running TOS.

Viewers of the show atleast deserve at explanation or an apology! Many of whom would have bought into the story of Karen the retail trader, turned multi-millionaire "super trader", and gone ahead and funded their Dough/ TD accounts.

"Free markets work because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or incentives for skill. The strategy is, then, to tinker as much as possible and try to collect as many Black Swan opportunities as you can"
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Old June 2nd, 2016, 04:49 PM   #5397 (permalink)
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Neo1 View Post
I started watching tastytrade after watching a Karen video, I'd say a lot of "tastytraders" started out the same way. The Karen videos have drawn far more attention than any of their other content. 3 out of their top 5 most viewed Videos are staring Karen! SOS must have had an inkling of what was going on, he said he used to monitor her trades when he was running TOS.

Viewers of the show atleast deserve at explanation or an apology! Many of whom would have bought into the story of Karen the retail trader, turned multi-millionaire "super trader", and gone ahead and funded their Dough/ TD accounts.

She took a big loss Oct 2014. The "Scheme Trading" started after that. So many of those tastytrade videos were made before she did those "Scheme Trades".

But since her performance was based on realized profit and didn't include unrealized profit & losses, we don't have a good idea what her actual performance was.

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Old June 2nd, 2016, 05:02 PM   #5398 (permalink)
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casey44 View Post
@ron99 , my memory is your noting (a few months ago I think) that the ratio spread you evolved for the ES to hedge a flash crash would not work for commodities.

My understanding for your latest on the ES was:
DTE ~ 100-120.
Short one @ 5 to 8 delta.
Buy two 1.5 delta @, targeting a net delta of 2 to 3.5.
Exit after 30 days or <80 DTE.

If I've got all of the above correct I wondered why it would not be as effective for a commodity? Am still in early stages of option education. Most all of my ES trades per the above have been positive.

Thanks for all you've contributed.

Start reading at this post to see my research on commodities other than ES.
https://futures.io/options-futures/12309-selling-options-futures-503.html#post523342

The main problem is that you cannot get as far OTM on other commodities as you can for ES and have decent dollar value of the premium. Thus you are more at risk when market moves quickly against you.

FWIW I talked to one person who had on short ES puts on Aug 24, 2015. He was able to ride out the huge drop and later make a profit because he was only using 10% of his money to cover margin. So he was 10X instead of the 3X I had been using.

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Old June 2nd, 2016, 05:11 PM   #5399 (permalink)
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Here's another article with decent explanation of what Karen did wrong.
Karen Bruton "The Supertrader" Goes Rouge; Defrauds Investors

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Old June 4th, 2016, 05:03 PM   #5400 (permalink)
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Seasonal Charts


I'm working on my own online seasonal charts. This is just a first try. Just ES contract now. Will add others later. I have the last 6-9 months of settlement prices for each major contract since 2006.

You can choose which contracts and which months to show on charts. There is also a chart that shows the average price of the contracts you chose.

These charts below show the ES Sep contracts for all years 2011 to 2016 for the months May June & July. Plus the average for each day of all of those contracts.

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


Here is the link to my charts. There are also charts for DCOT and the weekly energy inventory report. And my dairy charts.

https://public.tableau.com/profile/ron.h8870#!/

Any suggestions to improve them would be appreciated.

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