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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:570,062 / 5,734
Last Reply:Yesterday (01:01 AM) Attachments:642

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Selling Options on Futures?

Old January 29th, 2013, 10:38 AM   #581 (permalink)
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Hi Ron,

I'm a newbie in selling Fop and would like to ask you:
What have you been using to analyse a commodity fundamentally?




ron99 View Post
Thanks tigertrader for the links.

"IMO, never be satisfied with your trading and never get complacent about your trading. You can always learn more, you can always trade better, and you can always make more money."

I'm a fundamental seller of options. I have never used TA. I don't see a reason to complicate my trading and make my day harder to earn money I really don't need.

I have made well into 7 figures trading in 13 years. Sold my company 11 years ago. Told my wife a few years ago to quit her job. We built a nice house in the woods in the country. I watch deer and wild turkeys from my desk while trading.

I am more satisfied and less stressed out than anytime in my life.


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Old January 29th, 2013, 11:44 AM   #582 (permalink)
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Ron99 returns

Ron99 when you post your annual returns is it on the whole account or the money you use for margin and excess. So when you returned 111% say on a 100,000 account you made 111,000 dollars profit? And second you mentioned when you sell far otm it's very easy for your premium to double in price so you don't use the 100% rule. do you exit the trade when you use up your excess margin? can you please give me an example on crude cause I'm informed on crude thanks.

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Old January 29th, 2013, 01:23 PM   #583 (permalink)
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ron99 View Post
Here's a lesson on why you don't want to go too far out in time selling options.

Time erosion gets stronger the closer you get to expiration. Thus margin and premium drop quicker. The further out in time you are the more that the option will follow the future instead of ignoring it.

So very true Ron99! I have the same observations and agree that there is no need to go too far out in time.

I took a look at SBk3 strikes and also looked at several charts which shows that SB takes a big tumble starting usually in March. I am still confused as to why Cordier would suggest selling puts into the coming seasonal downtrend


Last edited by MJ888; January 29th, 2013 at 01:32 PM.
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Old January 29th, 2013, 02:07 PM   #584 (permalink)
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kevinkdog View Post
For Ron (and other far OTM option sellers) -

If you look back at past trades, do you find yourself biased towards selling puts, or selling calls?

I would imagine that for most instruments that selling puts would be more common, since it is less risky (selling calls in crude could be dangerous if a terrorist attack occurs, grains can skyrocket in droughts). For ES options, I would think selling calls might be preferable (think of a stock market crash).

I'm curious about the thoughts of the experienced experts here...

When I use to short/strangle ES options, I found that it was harder to get decent premium at far out strikes on ES calls. While on the put side I can go much farther out. I suppose there are many many more buyers of puts (to hedge) than calls when it comes to ES. I was once told that the equities markets usually meltdown suddenly but melts up very slowly like the past 7-8 weeks. On the other hand, the premium on ES puts double-triple-quadruple or more on strikes that are 50%-70% OTM AFTER a 10%-12%-15% sell off. Those are the best times to sell puts. However, I would caution against taking a large position since there is no way to predict if the sell off is over. I do not trade ES options regularly any more because I can get a better ROI trading other things.

As for grains and commodities that have clear seasonal trends, it is much easier to position. Plain and simple, know the seasonal trends and DO NOT go against it. The advantage of selling far OTM is that I do not need to be exact in timing. Many times I was either early or late in entering a position but being far OTM has allowed me to weather the storm without losing too much sleep.

There is always a terror threat when trading CL calls. Does that mean I won't sell CL calls? No. But I do keep my positions small.

Just my two cents worth.......

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Old January 29th, 2013, 02:08 PM   #585 (permalink)
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ron99 View Post
I was up 48% in 2010. I am up 78% in 2011. Probably 60% of my gain is buying options and 40% is selling options.

Selling options is a safer and more consistent gain. Buying options for me is riskier, but there is potential for more gain.

None of my option trading is day trading. When I sell options I usually keep them to expiration.

Hi,

I am an Active Stocks Options Trading both Buying and Selling, very intereted to find out more about Selling Options On Futures, do you mind sharing some of your recent trades and the setup of the trades.

Also interested to find out if you have already evaluate the pro and con comparing selling options on ETF options vs Futures Options? Thanks.

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Old January 29th, 2013, 02:38 PM   #586 (permalink)
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MJ888 View Post
So very true Ron99! I have the same observations and agree that there is no need to go too far out in time.

I took a look at SBk3 strikes and also looked at several charts which shows that SB takes a big tumble starting usually in March. I am still confused as to why Cordier would suggest selling puts into the coming seasonal downtrend


MJ:

His newsletters always end with something like "Clients will be notified when to enter the trade..." or something of that nature. He might notify clients after the seasonal trend has begun or some other trading system signal.

But yes I agree. That one has a WTF stamped on it in my opinion....

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Old January 29th, 2013, 02:47 PM   #587 (permalink)
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Over time, Cordier's recommendations have become more vague. In the past he would indicate what month and what strikes Liberty is looking at but now it's just a general suggestion.

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Old January 29th, 2013, 04:45 PM   #588 (permalink)
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MJ888 View Post
Over time, Cordier's recommendations have become more vague. In the past he would indicate what month and what strikes Liberty is looking at but now it's just a general suggestion.

Yes I have noticed that too. I even sent him an email once because he had got the puts and calls mixed up based on his charts. Maybe the emails to the general public are deliberately getting more confusing to discourage going it alone.

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Old January 29th, 2013, 06:26 PM   #589 (permalink)
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Britkid99

Hey britkid99, I asked ron99 a question post 582 maybe you can answer it's about his margin returns and exit strategy post 582 and also sucden emailed me back and they have a platform called star what seems to be an online trading system. Peace.

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Old January 29th, 2013, 06:35 PM   #590 (permalink)
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Looking at July 2013 Sugar:

This is the weekly chart. There is some bullish divergence with the RSI and price has been rangebound for a while. However, if the 18 level support is broken then look out below!

The seasonal trends do show a move to the upside in right about now then again in June/July. I'd rather see the move up and out of this area first before selling puts here. But, the July 17 puts are only going for about $300. That is pretty crappy premium for 139 days until expiration an only 1.77 OTM. Nooooooope.

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