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Selling Options on Futures?
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Selling Options on Futures?

  #6381 (permalink)
Market Wizard
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uuu1965 View Post
When they are going to accept this tax cut? Are there any deadline?

Full Senate is starting to work on it next week. The goal is before the end of the year. If Senate passes a tax cut bill that bill and House bill will need to match through an agreement. Could be major changes to the bills through that process.

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  #6382 (permalink)
Trading for Fun
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ron99 View Post
I'm thinking about ignoring my rule about keeping ES spread positions on all of the time.

Some of the rise in the stock market has been because they are thinking US corporations will be getting a huge tax cut. I suspect the road to tax cuts will have many detours. I don't trust the controlling party in US Congress to get it done as promised.

If that happens I suspect the stock market will finally have its' reason to have a major correction.

So I am going to exit my slightly profitable ES spreads next week.

I am debating whether to buy a few ES puts to make money on the crash. I will probably wait until tax cut proceedings start to falter to buy them if I do.

If tax cuts are as promised then hopefully I can get back in without missing too much profit.

If you were to buy ES puts what strike? Exp?

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  #6383 (permalink)
Market Wizard
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rajab View Post
If you were to buy ES puts what strike? Exp?

I would buy Jan puts at a low delta like 1 or 2 if I was suspecting a large drop in futures early Dec. You get a higher ROI buying low priced puts. But you have to have the large drop in futures quickly.

Dec puts are too close to expiration and the time erosion is too high and that prevents any large increase in put premium unless they went ITM.

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  #6384 (permalink)
Market Wizard
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On Nov 1 I sold ESg8p2040(2)p1800(3) for an average price of 2.9619. Today I exited at an average price of 1.7143. 27 days held. ROI about 1.8%.

This makes 12 spreads traded this year.

I am going to wait until after US Congress passes? tax cut bill and spending bills to keep government open before I reenter. Too much risk if those don't happen.

I know I am violating my rule of keep positions on at all times and ignore any news. But I would rather miss profit than give away profit.

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  #6385 (permalink)
Trading Apprentice
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Calendar spreads?

Hi guys, have a question about selling options in this low IV environment. Of course there are issues with the tax bill and the investigations, etc happening, but wanted to understand what the thoughts were on this forum about selling premium with calendars:

For ex: Short ESH8 Mar'18 2400P and Buy ESH8 Jan'18 2400P for net credit (I think ~$650 credit with ~$900 margin).

Idea, atleast in principal, is that any short term corrections are protected through near-term long option and neutral to bullish move would deteriorate both options. On Jan'18 long leg expiry, we'd roll to a Long Mar'18 Put and Short Jun'18 Put.

Not sure if this has been tried out before and if anyone would care to share their thoughts. Trying to find a way to stay invested with some protection from externalities.

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  #6386 (permalink)
Market Wizard
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ys91 View Post
Hi guys, have a question about selling options in this low IV environment. Of course there are issues with the tax bill and the investigations, etc happening, but wanted to understand what the thoughts were on this forum about selling premium with calendars:

For ex: Short ESH8 Mar'18 2400P and Buy ESH8 Jan'18 2400P for net credit (I think ~$650 credit with ~$900 margin).

Idea, atleast in principal, is that any short term corrections are protected through near-term long option and neutral to bullish move would deteriorate both options. On Jan'18 long leg expiry, we'd roll to a Long Mar'18 Put and Short Jun'18 Put.

Not sure if this has been tried out before and if anyone would care to share their thoughts. Trying to find a way to stay invested with some protection from externalities.

You need to back test it to see how it performs over the years.

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  #6387 (permalink)
Market Wizard
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ron99 View Post
On Nov 1 I sold ESg8p2040(2)p1800(3) for an average price of 2.9619. Today I exited at an average price of 1.7143. 27 days held. ROI about 1.8%.

This makes 12 spreads traded this year.

I am going to wait until after US Congress passes? tax cut bill and spending bills to keep government open before I reenter. Too much risk if those don't happen.

I know I am violating my rule of keep positions on at all times and ignore any news. But I would rather miss profit than give away profit.

LOL I get out of short put spreads on Tuesday and Friday the market crashes for a reason unrelated to my reasons for staying out.

I was due for some luck.

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  #6388 (permalink)
Trading for Fun
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ys91 View Post
Hi guys, have a question about selling options in this low IV environment. Of course there are issues with the tax bill and the investigations, etc happening, but wanted to understand what the thoughts were on this forum about selling premium with calendars:

For ex: Short ESH8 Mar'18 2400P and Buy ESH8 Jan'18 2400P for net credit (I think ~$650 credit with ~$900 margin).

Idea, atleast in principal, is that any short term corrections are protected through near-term long option and neutral to bullish move would deteriorate both options. On Jan'18 long leg expiry, we'd roll to a Long Mar'18 Put and Short Jun'18 Put.

Not sure if this has been tried out before and if anyone would care to share their thoughts. Trying to find a way to stay invested with some protection from externalities.

Like I heard on CNBC "Some times the best Trade is NO Trade". I did buy a very small ESH8 Jan'18 2000p position to satisfy my psudogambeling thirst. I realise no backtest has shown a 25% drop in such a short time but close to the money can realize me some profits.

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  #6389 (permalink)
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ron99 View Post
On Nov 1 I sold ESg8p2040(2)p1800(3) for an average price of 2.9619. Today I exited at an average price of 1.7143. 27 days held. ROI about 1.8%.

This makes 12 spreads traded this year.

I am going to wait until after US Congress passes? tax cut bill and spending bills to keep government open before I reenter. Too much risk if those don't happen.

I know I am violating my rule of keep positions on at all times and ignore any news. But I would rather miss profit than give away profit.

Are these worries about the tax reform are now over?

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  #6390 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,812 since Jul 2011
Thanks: 829 given, 4,943 received
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manuel999 View Post
Are these worries about the tax reform are now over?

No. They now need to prevent government shutdown by passing legislation to fund government. Republicans will need Democratic party votes to pass this one.

Current deadline date is midnight Dec 8. They are already talking about extending that deadline to either Dec 22 or Dec 30.

https://www.reuters.com/article/us-usa-congress-shutdown/democrats-to-join-trump...t-shutdown-idUSKBN1DY2IH

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