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Selling Options on Futures?
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Selling Options on Futures?

  #6351 (permalink)
Trading for Fun
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rsm005 View Post
Are you factoring commissions and fees into this? With the 2/3 method commissions are insane so a 1/1 method may return a lot more over time.

/rsm005/

Yes, commissions and fees are assumed to be $7 round-trip.

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  #6352 (permalink)
Market Wizard
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rsm005 View Post
Are you factoring commissions and fees into this? With the 2/3 method commissions are insane so a 1/1 method may return a lot more over time.

/rsm005/

I always factor in commissions when calculating ROI.

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  #6353 (permalink)
Trading for Fun
Henderson, NV, USA
 
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Coffee calls timing


I've been watching for the seasonal October spike in Coffee before pulling the trigger on some calls. Do you all think we just saw the peak of the spike or would it be better to wait for a higher rally?

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  #6354 (permalink)
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Calamari88 View Post
I've been watching for the seasonal October spike in Coffee before pulling the trigger on some calls. Do you all think we just saw the peak of the spike or would it be better to wait for a higher rally?

I am also watching coffee to sell OTM calls, but will not do it at current prices and until there is more certainty about La Nina.

There was some dryness during the blooming period which might cause the next crop to be smaller than early expectations. The probability of La Nina, which might cause very dry weather in some of the coffee growing areas of Brazil, currently is reported to be 60 %. There are reports of supply issues in Vietnam as well.

COT data is bullish. Thus, a move upwards could be a strong one.

Thus, although demand seems to be rather weak, there might be higher prices in the near future. If not, I will not be in this trade.

Best regards, Myrrdin

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  #6355 (permalink)
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Thought Exercise: Spreads during a market downturn

I wanted to throw this back out there and get some people's thoughts. The Bull Market has been charging along for a while now and it's always good to think of other strategies when the market's direction changes.

I've been doing some thinking around what could be done during a 10%-20% market pullback that's gradual rather than harsh. I've added a tail hedge that's fairly small, .5% on SPY but will probably change that to /ES next time around..just need t double check the math, but doesn't offer too much protection against a slow decline. I'd love to get some additional thoughts from people if they're in a thinking mood.

/rsm005/

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  #6356 (permalink)
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T-bond bid at 0 points?

Here's a screenshot below of T-bond on my trading platform at Gain. It says the bid is 0 points on the Dec 168 call. Bid size is over 2,000. How can a bid be put in for no points? I thought the lowest possible was the cabinet price of 1 point. I ask because I'm holding some short positions on that strike and waiting til expiration. However, if the possibility exists of exiting at 0 points right now I'd prefer that.

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  #6357 (permalink)
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Atlanta Georgia
 
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rsm005 View Post
I wanted to throw this back out there and get some people's thoughts. The Bull Market has been charging along for a while now and it's always good to think of other strategies when the market's direction changes.

I've been doing some thinking around what could be done during a 10%-20% market pullback that's gradual rather than harsh. I've added a tail hedge that's fairly small, .5% on SPY but will probably change that to /ES next time around..just need t double check the math, but doesn't offer too much protection against a slow decline. I'd love to get some additional thoughts from people if they're in a thinking mood.

/rsm005/

Can you be more specific in how you are using the term "tail hedge"?

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  #6358 (permalink)
Market Wizard
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rsm005 View Post
I wanted to throw this back out there and get some people's thoughts. The Bull Market has been charging along for a while now and it's always good to think of other strategies when the market's direction changes.

I've been doing some thinking around what could be done during a 10%-20% market pullback that's gradual rather than harsh. I've added a tail hedge that's fairly small, .5% on SPY but will probably change that to /ES next time around..just need t double check the math, but doesn't offer too much protection against a slow decline. I'd love to get some additional thoughts from people if they're in a thinking mood.

/rsm005/

I haven't found anything that will protect your short puts from a slow decline.

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  #6359 (permalink)
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Atlanta Georgia
 
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You could short calls or short the underlying agsinst that to give you a more neutral position. I do not short options. That is the tail risk that I worry about.

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  #6360 (permalink)
Elite Member
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Calamari88 View Post
Here's a screenshot below of T-bond on my trading platform at Gain. It says the bid is 0 points on the Dec 168 call. Bid size is over 2,000. How can a bid be put in for no points? I thought the lowest possible was the cabinet price of 1 point. I ask because I'm holding some short positions on that strike and waiting til expiration. However, if the possibility exists of exiting at 0 points right now I'd prefer that.

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Why would anyone sell you the call for 0?

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