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Selling Options on Futures?
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Selling Options on Futures?

  #551 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
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Favorite Futures: Options on Futures
 
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Selim View Post
Yes I did mean that ron99 about all your far out of the options not going into the money, ron99 during the financial crises of 2007 to 2009 how did you trade those markets for example oil was at 147 and went all the way to 30 something after it shot back up to the 90's even then your otm options woudnt have gone in the money? Cheers.

2008 I did not do well. Had some puts on that killed me during the summer. I wasn't smart enough to know I should have been selling calls. The 2nd half of 2008 I was out of options and doing crude spreads. Those did real well. But they quit working early in 2009.

I did very well in 2009.

Other trading strategies will work for a while then quit working. Option selling seem to always work. You just have to change commodities and timing.

But sometimes you just have to not be trading and wait for the markets to calm down.

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  #552 (permalink)
Trading for Fun
Houston, Texas
 
Futures Experience: Advanced
Platform: Interactive Brokers, OptionsXpress
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Favorite Futures: Options on Futures
 
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Selim,

If you have the time, scroll back and read this thread from the beginning. The advice here is fantastic. Like Ron99 said, Cordier's book is a very good read but I do find his recommendations are too close to the money. Cordier suggests strikes with delta's below 0.20 but I have found that going even farther out is safer. Such as strikes with delta below 0.10 or be like Ron99 and sell strikes with delta below 0.03

But like Cordier says over and over, a well established options selling portfolio is very boring especially at the start. It took me a LONG TIME to understand that. Waiting 60-90 or more days to collect decent profits is like waiting for paint to dry BUT if your positions are staggered like Cordier suggests, there would be sets of options expiring every month once you get going.

MJ888

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  #553 (permalink)
Elite Member
NW Florida
 
Futures Experience: Intermediate
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opts's Avatar
 
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Remember guys, Cordier does give a good foundation but his method does not necessarily mean that you must follow his ways. Selling the options several months out does give a higher premium but you don't have to wait several months to take a profit. I sell options with several profit strategies in mind. If you are selling with three or four months of time premium you can still buy back the options with two or three months of time left. A profit is a profit no matter how you look at it. I often sell options with premiums of no less $50 with about a month of time left and let those expire. There are numerous profit % strategies that you can use. IT IS YOUR MONEY.

I agree 100% with ron99 that you must be well funded with cash in your account to keep there as cash. Over-positioning can be very painful if you do not have the cash to cover. Keep an eye on the futures news calendars as well.

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  #554 (permalink)
Trading for Fun
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opts View Post
Remember guys, Cordier does give a good foundation but his method does not necessarily mean that you must follow his ways. Selling the options several months out does give a higher premium but you don't have to wait several months to take a profit. I sell options with several profit strategies in mind. If you are selling with three or four months of time premium you can still buy back the options with two or three months of time left. A profit is a profit no matter how you look at it. I often sell options with premiums of no less $50 with about a month of time left and let those expire. There are numerous profit % strategies that you can use. IT IS YOUR MONEY.

Totally agree. I sold three April CL 70 puts back on December 4 for a premium of 0.72, they expire March 15 but I exited last Friday at 0.06 for a profit of $1,906 and if I would have waited until today, the premium is 0.04. I saw no reason NOT to lock in the profit, for me there was no need to wait until March 15 to make an additional $180 when I can lock in $1,906

MJ888

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  #555 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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MJ888 View Post
Totally agree. I sold three April CL 70 puts back on December 4 for a premium of 0.72, they expire March 15 but I exited last Friday at 0.06 for a profit of $1,906 and if I would have waited until today, the premium is 0.04. I saw no reason NOT to lock in the profit, for me there was no need to wait until March 15 to make an additional $180 when I can lock in $1,906

MJ888

And this shows that there are several ways to sell options. You did well and made good profit.

I will sell these options for .04 and make 4.1% in 50 days. 29.8% annualized.

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  #556 (permalink)
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A few profit taking strategies right there.

I'm currently strangling March Wheat and my Feb 655's are going to expire worthless tomorrow. Keeping an eye on SI, and CL.

One thing I noticed about this forum and this thread in particular is that nobody is ripping on anyone here for selling options on futures. There's no "Your and idiot for even thinking about that"...etc. That's worth a lot also

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  #557 (permalink)
Market Wizard
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opts View Post
A few profit taking strategies right there.

I'm currently strangling March Wheat and my Feb 655's are going to expire worthless tomorrow. Keeping an eye on SI, and CL.

One thing I noticed about this forum and this thread in particular is that nobody is ripping on anyone here for selling options on futures. There's no "Your and idiot for even thinking about that"...etc. That's worth a lot also

I credit Big Mike and the other moderators for that. People who insult and degrade others here quickly find themselves suspended or have their membership revoked.

Thanks Big Mike!

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  #558 (permalink)
Market Wizard
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ron99 View Post
Short options - 746 trades of 5,034 contracts = 150k profit. A lot less contracts than 2011 but more profit.

Hi Ron -

Your willingness to share has inspired me to consider options on futures - something I have never done before. Maybe in an IRA acct. Of course, I can already hear the established players licking their chops at this new fresh meat coming their way!

Anyhow, in 2012 you had 746 short option trades. I am assuming that includes trades where you add on positions as expiration draws closer, correct? If I am correct, do you have a count of how many "unique" trades you put on? So, for example if you sold May Coffee puts today, and then sold more (same expiration, maybe different strikes) a month from now, that would only count as 1 unique trade.

I'm just trying to get a sense of how many opportunities you find per year.

THANKS, and stay warm in cold Ohio!

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  #559 (permalink)
Trading for Fun
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Futures Experience: Advanced
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Broker/Data: Options Express
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opts View Post
One thing I noticed about this forum and this thread in particular is that nobody is ripping on anyone here for selling options on futures. There's no "Your and idiot for even thinking about that"...etc. That's worth a lot also

This is one of the only trading forums that I am a member of. And yes, this thread is one of the best sharing of ideas that I have come across on the net.

Thanks Big Mike for keeping it this way. And thanks to the regulars on this thread for keeping it civilized.

From my experience, I have found that when there is a lot of disrespect and ripping within a thread, it usually involves people who are not actually trading and are there just to bash people.

I particularly like that everyone here is respectful of each other's ideas and trading style. Trading is NOT about being right or wrong, it is about MAKING MONEY.

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  #560 (permalink)
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Broker


Hey everybody I was just wondering if you guys have heard of sucden international they seem to focus on commodities and options, they are based in London and they seem to be very professional. Thanks

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