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Selling Options on Futures?
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Created: by ron99 Attachments:761

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Selling Options on Futures?

  #6681 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,918 since Jul 2011
Thanks: 865 given, 5,190 received
Forum Reputation: Legendary


dvbattul View Post
Hi Ron,
I am returning to this great forum after few months. I shall be grateful if you could let me know the page number where backtest of the above-mentioned strategy is done after which you started trading this strategy.
Regards,
Dilip

Start at about page 600.

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  #6682 (permalink)
Trading Apprentice
BARCELONA/SPAIN
 
Futures Experience: Intermediate
Platform: ninjatrader
Favorite Futures: futures
 
Posts: 27 since Sep 2013
Thanks: 2 given, 2 received

Strategy modifications in new economic junture

Hi, Ron. After studying and putting into practice the strategy selling -2, +3 put futures options, I wanted to ask you a question. As you know, the federal reserve has raised interest rates and expects to raise them 2 more times this year and 3 times more in 2019. Therefore, the S&P500 will foreseeably have a downward trend in coming years. This is not good news for the strategy, since it behaves better in bull markets. I intuit, and correct me if I'm wrong, that the closing of the positions will lengthen more time, and therefore also lower profitability (ROI). How could we modify the system so as not to lose profitability ?. Selling calls ?, Selling calls and puts at the same time? Any consideration?
Thanks for your invaluable help

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  #6683 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,918 since Jul 2011
Thanks: 865 given, 5,190 received
Forum Reputation: Legendary



tinaturner View Post
Hi, Ron. After studying and putting into practice the strategy selling -2, +3 put futures options, I wanted to ask you a question. As you know, the federal reserve has raised interest rates and expects to raise them 2 more times this year and 3 times more in 2019. Therefore, the S&P500 will foreseeably have a downward trend in coming years. This is not good news for the strategy, since it behaves better in bull markets. I intuit, and correct me if I'm wrong, that the closing of the positions will lengthen more time, and therefore also lower profitability (ROI). How could we modify the system so as not to lose profitability ?. Selling calls ?, Selling calls and puts at the same time? Any consideration?
Thanks for your invaluable help

Nobody knows what the market will be doing one hour, day, month, year from now with any certainty.

Raising interest rates does not mean S&P 500 will decrease. Fed rate increased from 2004 to 2007. S&P 500 went up during that time.

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Selling ES calls is extremely low ROI and not worth it in my opinion.

The strategy I am using will work except during extreme drops like Fall 2008. Yes it will have lower ROI during some periods. But you need to just take what the market gives you. Trading this strategy is not for people that want excitement of making many trades. It's boring. It takes patience.

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  #6684 (permalink)
Trading for Fun
westhills california US
 
Futures Experience: Beginner
Platform: TOS
Favorite Futures: FOREX,STOCKS,FUTURES
 
Posts: 83 since May 2015
Thanks: 93 given, 19 received

The Puts I SOLD on Jan 22. -2,+3(115 DTE) are down drastically this past 24 hours. I started with 10XIM. My question for Ron or any on else is would you consider openning a second trade for the same expiration date which will obviously lower the overall margin. overlapping trades.

Thoughts please

Thanks
Babak

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  #6685 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,918 since Jul 2011
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rajab View Post
The Puts I SOLD on Jan 22. -2,+3(115 DTE) are down drastically this past 24 hours. I started with 10XIM. My question for Ron or any on else is would you consider openning a second trade for the same expiration date which will obviously lower the overall margin. overlapping trades.

Thoughts please

Thanks
Babak

Explain "second trade".

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  #6686 (permalink)
Trading for Fun
westhills california US
 
Futures Experience: Beginner
Platform: TOS
Favorite Futures: FOREX,STOCKS,FUTURES
 
Posts: 83 since May 2015
Thanks: 93 given, 19 received


ron99 View Post
Explain "second trade".

So On Jan 22 i put on EWK3K8 P(-2)2230 and EWK3K8 P(+3)1940 x10 IM. Currently the MM is about3xIM. Since Futures are down I may be able to get a better ROI if I open ESM8 p(-1,+2) Delta 5 and 1.5 respectively. My first trade has 57 days to expiration and should start decaying faster. BY entering the June contract I am obviously reducing the total margin buffer on my account. My question is do you always close one before opening the next trade?
Thanks

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  #6687 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,918 since Jul 2011
Thanks: 865 given, 5,190 received
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rajab View Post
So On Jan 22 i put on EWK3K8 P(-2)2230 and EWK3K8 P(+3)1940 x10 IM. Currently the MM is about3xIM. Since Futures are down I may be able to get a better ROI if I open ESM8 p(-1,+2) Delta 5 and 1.5 respectively. My first trade has 57 days to expiration and should start decaying faster. BY entering the June contract I am obviously reducing the total margin buffer on my account. My question is do you always close one before opening the next trade?
Thanks

Your previous post said adding a second trade would lower margin. Obviously that isn't correct.

Yes if you have enough cash excess you can add more positions. But I wouldn't do that if the cash excess would become too small.

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  #6688 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 264 since Jan 2015
Thanks: 13 given, 204 received

All,

I'm trying to use the spreadsheet to test a few things and am having problems with the month for futures and for options. I enter the start date as 01/02/2018 and hit "track select" for the following

Futures Month: ESM8
Options Month: EWJ8

This results in a big fat empty line. However when I do

Futures Month: ESH8
Options Month: ESH8

or

Futures Month: ESM8
Options Month: ESM8

it works. Just the number of days to expiration aren't where I need them to be. Any help would be most appreciated.

Thanks
/rsm005/

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  #6689 (permalink)
Elite Member
Steubenville Ohio
 
Futures Experience: Intermediate
Platform: OX, OEC, RJO
Favorite Futures: Options on Futures
 
Posts: 251 since Sep 2012
Thanks: 27 given, 264 received


rsm005 View Post
All,

I'm trying to use the spreadsheet to test a few things and am having problems with the month for futures and for options. I enter the start date as 01/02/2018 and hit "track select" for the following

Futures Month: ESM8
Options Month: EWJ8

This results in a big fat empty line. However when I do

Futures Month: ESH8
Options Month: ESH8

or

Futures Month: ESM8
Options Month: ESM8

it works. Just the number of days to expiration aren't where I need them to be. Any help would be most appreciated.

Thanks
/rsm005/

Try EWM8 for futures month and EWJ8 for options month.

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  #6690 (permalink)
Elite Member
vancouver BC/Canada
 
Futures Experience: Beginner
Platform: Zaner360, OX
Broker/Data: DeCaley
Favorite Futures: options
 
Posts: 264 since Jan 2015
Thanks: 13 given, 204 received



ron99 View Post
I can't access it too. I'll email CME.

EDIT I called CME and it is working now. But they don't know why it wasn't working and they don't know why it is now working.

Ron,

Not sure what happened but that same directory won't open again for the same reasons.... Can you ping them again or share the contact information so I can give them a call. I got January but only half of Feb. When I realized the FTP didn't finish the download I went back only to find the directory inaccessible again.

Thanks,
/rsm005/

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