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Selling Options on Futures?


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Selling Options on Futures?

  #5701 (permalink)
 
SMCJB's Avatar
 SMCJB 
Houston TX
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  #5702 (permalink)
 
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 SMCJB 
Houston TX
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How did everybody do on the 5% spike down last night? If you got out was there any liquidity?

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  #5703 (permalink)
 ron99 
Cleveland, OH
 
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SMCJB View Post
How did everybody do on the 5% spike down last night? If you got out was there any liquidity?

Rode it out last night and was only down 8% for the day at biggest drop of ES. The 2 ES longs helped protect the one short well.

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  #5704 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
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Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
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Due to uncertainty, Trump and possible Fed interest rate hike, I decided to take profit on some ES spreads. I used 6X IM.

On 9/28/16, sold ESf7p1710p1480(2) for 2.55. Bought back today at 1.20. 42 days held. 2.6% monthly ROI.

On 9/29/16, sold ESf7p1740p1520(2) for 2.30. Bought back today at 1.60. 41 days held. 1.0% monthly ROI.

On 10/11/16, sold ESf7p1750p1540(2) for 2.95. Bought back today at 1.55. 29 days held. 3.8% monthly ROI.

On 10/18/16, sold ESf7p1720p1520(2) for 1.90. Bought back today at 1.10. 22 days held. 2.1% monthly ROI.

I didn't fully follow my wait for 50% drop in premium on some of these. Not sure if that is right or not.

I am torn on replacing these positions with more positions or sitting out until things have more certainty. But who knows when that will happen.

I do still have this position.
On 10/28/16, sold ESg7p1700p1460(2) for 3.15. Right now it is at 2.40.

What are you doing right now?

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  #5705 (permalink)
 
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 SMCJB 
Houston TX
Legendary Market Wizard
 
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Platform: TT and Stellar
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I'm short some odd lot NQ puts, and long ES & NQ futures, but I view this more as an investment rather than a trade. My position is currently under-weighted vs my target exposure.

The correlation between the markets and polls prediction of a Clinton's win has been uncanny the last 10 days. Hence I wasn't surprised we sold off last night as the polls all became wrong. Very surprised we bounced back so quickly. I had some low ball bids out there last night and only got filled on one (2031.25). Not sure what the future holds though, so sold them back out this morning and just booked the profit. My gut tells me we're going back down lower, but I don't normally trade on gut feelings. Difficult to separate the personal bias from the facts.

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  #5706 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
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Ha. I don't follow my plan of immediately replacing closed positions because I think I am smarter than the market and ES jumps 30 points after I exited my positions and didn't replace them.

So now I have a tougher decision to make. Do I sell them now or wait for a lower ES day? I'm going to wait.

Anybody think today's rise is shorts bailing out way too late and we drop when they are done buying?

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  #5707 (permalink)
uuu1965
Riga Latvia
 
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ron99 View Post
Due to uncertainty, Trump and possible Fed interest rate hike, I decided to take profit on some ES spreads. I used 6X IM.

On 9/28/16, sold ESf7p1710p1480(2) for 2.55. Bought back today at 1.20. 42 days held. 2.6% monthly ROI.

On 9/29/16, sold ESf7p1740p1520(2) for 2.30. Bought back today at 1.60. 41 days held. 1.0% monthly ROI.

On 10/11/16, sold ESf7p1750p1540(2) for 2.95. Bought back today at 1.55. 29 days held. 3.8% monthly ROI.

On 10/18/16, sold ESf7p1720p1520(2) for 1.90. Bought back today at 1.10. 22 days held. 2.1% monthly ROI.

I didn't fully follow my wait for 50% drop in premium on some of these. Not sure if that is right or not.

I am torn on replacing these positions with more positions or sitting out until things have more certainty. But who knows when that will happen.

I do still have this position.
On 10/28/16, sold ESg7p1700p1460(2) for 3.15. Right now it is at 2.40.

What are you doing right now?

Today I close EWZ6 P1870/1750 spread (1:1) at 2.7 ( MROI=3.8%) which I bought on 9/29 at 5.5
Still hold:
EWF7 P 1760/1375 spread (1:2) from 10/05 (price 5.85)
EWF7 P 1910/1725 spread (1:1) from 10/28 (price 11.75)

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  #5708 (permalink)
 rsm005 
vancouver BC/Canada
 
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I'm not really going to open any new positions until Trump is in office and we get to see how the world reacts. I have to wait until the new year anyway for tax reasons and the details of our new house. I'm genuinely worried about the impact of all the changes to the trade agreements, he's promised to do it in the first 100 days.

What about you guys, most seem to just have small positions open?

/rsm005/

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  #5709 (permalink)
 
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 SMCJB 
Houston TX
Legendary Market Wizard
 
Experience: Advanced
Platform: TT and Stellar
Broker: Advantage Futures
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,033 since Dec 2013
Thanks Given: 4,359
Thanks Received: 10,172

Closed all options today, and reduced delta exposure by over a third.

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  #5710 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
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Here is an interesting comparison on a KC call option spread between two different months.

Left hand side is KC Jan 200-230 call spread 1:1 using 6X IM. I put this position in my account. Right hand side is same strikes but March. Starting DTE was 58 vs 121. (Note I would have preferred a higher DTE than Jan's but Feb options had almost no volume.)


After 29 days held, the Jan premium was down to 44% of starting price on 20161012. But the March premium was still 127% of the premium on 20161012.

The draw down for the Jan spread on 20161107 was 15.6% but the March spread was 33.6%.

One other interesting thing, and this shows why selling options is an easier way to trade, is that KC futures on 20161012 were 156. 29 days later they were higher at 166. But even though I was wrong on the direction of futures the position made a nice profit. 4.1% monthly ROI.

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