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Selling Options on Futures?
Started:July 19th, 2011 (06:16 PM) by ron99 Views / Replies:569,198 / 5,728
Last Reply:December 6th, 2016 (05:26 PM) Attachments:642

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Selling Options on Futures?

Old February 4th, 2013, 04:52 PM   #651 (permalink)
Trading Apprentice
Singapore
 
Futures Experience: Intermediate
Platform: Rtrader,Zaner 360
Broker/Data: Deep Discount Trading/Rithmic,DeCarley/Gain
Favorite Futures: Future Options
 
Posts: 35 since Sep 2012
Thanks: 46 given, 49 received

Ron, appreciate the advice, and the experiences you recount sound pretty extreme.

We need to be careful we are not trying to find a devil behind every bush here, our only avenue to carry out our business, whether we like it or not, is via a FCM, if we label them all as having an 'irrational fear ' and ready to close our positions at a moments notice , we won't trade anywhere and we may as well pack up an go home now.

As a conservative option seller, I welcome such advice from a broker, it basically tells me option writers are welcome but be well capitalised and conservative. If I was a broker or FCM I would say something very similiar to clients.

After doing the due diligence I'll consider my brokers as friendly until proven otherwise, the last thing we need is for us conservative sellers to having an irrational fear that our broker is going all of a sudden be unreasonable .

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Old February 4th, 2013, 05:22 PM   #652 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
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Harvard16 View Post
Ron, appreciate the advice, and the experiences you recount sound pretty extreme.

We need to be careful we are not trying to find a devil behind every bush here, our only avenue to carry out our business, whether we like it or not, is via a FCM, if we label them all as having an 'irrational fear ' and ready to close our positions at a moments notice , we won't trade anywhere and we may as well pack up an go home now.

As a conservative option seller, I welcome such advice from a broker, it basically tells me option writers are welcome but be well capitalised and conservative. If I was a broker or FCM I would say something very similiar to clients.

After doing the due diligence I'll consider my brokers as friendly until proven otherwise, the last thing we need is for us conservative sellers to having an irrational fear that our broker is going all of a sudden be unreasonable .

I didn't label all FCMs as having an irrational fear. But some do.

IB is one. Otherwise they wouldn't charge 3X to 6x exchange margin.

And an FCM that says "Option Writing has been the # 1 Destroyer of Major Banks & Brokerages so it cannot be taken lightly." is another. They are lumping what we do in with the extreme things that banks do. It isn't the same.

The place that made me dump positions when I had 80% cash was always giving me grief about option selling until they went over the edge and made me dump positions when I had plenty of cash. The hand writing is on the wall.

There are many places that don't have irrational fear of option selling. That is where we need to place our accounts.

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Old February 5th, 2013, 10:47 AM   #653 (permalink)
Elite Member
NW Florida
 
Futures Experience: Intermediate
Platform: OX and TOS
Favorite Futures: Futures Options, Stocks
 
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Posts: 233 since Aug 2012
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Does anyone use or know of anyone that has used Trade Monster? I have been in contact with them recently:

$1.75 per side to write futures options + exchange fees

Use CQG trader

Margin and SPAN standard rates per OX...so they say.

Any thoughts?

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Old February 5th, 2013, 01:39 PM   #654 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received

I have been selling Apr CL 70 puts for .03 today. 3.9% monthly ROI. Delta 0.0066.

There are plenty bid there.


Note to OX traders. Their option margins are incorrect. They haven't updated since Thursday night. They know about it. They are working to fix it.

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Old February 5th, 2013, 02:43 PM   #655 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
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Futures Edge on FIO

ron99 View Post
I have been selling Apr CL 70 puts for .03 today. 3.9% monthly ROI. Delta 0.0066.

There are plenty bid there.


Note to OX traders. Their option margins are incorrect. They haven't updated since Thursday night. They know about it. They are working to fix it.


Hi Ron -

What margin are you using? I plugged in the what the Trade calculator gave for margin ($145.20), and I get 4.5% ROI, with $5.51 assumed cost (cost for you, not for me!).

Maybe my calcs are off...

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Old February 5th, 2013, 02:46 PM   #656 (permalink)
Trading Apprentice
Toronto/Canada
 
Futures Experience: Advanced
Platform: Sierra Charts
Favorite Futures: Options
 
Posts: 25 since Oct 2012
Thanks: 20 given, 5 received

IB is showing 910 Each for those, FYI.....

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Old February 5th, 2013, 03:05 PM   #657 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received

For some unknown reason, maybe OX made a software change Friday night, their margins are from Thursday. They haven't updated the margins since then.

I'm using SPAN margins and adding the OX 20%. That comes to $162.

IB at $910??? That's 462% more than OX.

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Old February 5th, 2013, 03:13 PM   #658 (permalink)
Trading Apprentice
Toronto/Canada
 
Futures Experience: Advanced
Platform: Sierra Charts
Favorite Futures: Options
 
Posts: 25 since Oct 2012
Thanks: 20 given, 5 received

Crazy, I know!
Makes it almost impossible to sell low Delta options!
They are the only game in town in Canada

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Old February 5th, 2013, 03:16 PM   #659 (permalink)
Elite Member
Cleveland Ohio/United States
 
Futures Experience: Advanced
Platform: Tradestation
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Posts: 2,195 since Jul 2012
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ron99 View Post
For some unknown reason, maybe OX made a software change Friday night, their margins are from Thursday. They haven't updated the margins since then.

I'm using SPAN margins and adding the OX 20%. That comes to $162.

IB at $910??? That's 462% more than OX.


That is pretty cool - you seem to know their system better than they do!

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Old February 5th, 2013, 03:39 PM   #660 (permalink)
Market Wizard
OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,324 since Jul 2011
Thanks: 634 given, 3,905 received



kevinkdog View Post
That is pretty cool - you seem to know their system better than they do!

Yeah I have informed them of problems with their system that they didn't know about. Trade Calc was miscalculating Profit & Loss for a while. And the Trade Now button wasn't working. I got them to realize the problem and fix it.

The one cool thing is they have a Wish List where you can send them ideas. They have actually used a couple of my ideas.

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