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Selling Options on Futures?
Updated July 28, 2023
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Selling Options on Futures?
April 9th, 2018, 12:40 PM
Cleveland, OH
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785
A story of what can happen if you don't have risk protection for your short ES puts.
Quoting
Mutual fund manager LJM Partners was riding high in June when it won a big accolade: In front of 200 peers at the Four Seasons Hotel in Chicago, a top LJM executive accepted a Pinnacle Award, one of the highest honors in the derivatives industry, for best options strategy.
Quoting
Morningstar has lambasted the firm's strategy of shorting
volatility by selling put options on S&P 500
futures contracts , without the protection of owning underlying securities.
https://www.chicagobusiness.com/article/20180406/ISSUE01/180409959/how-the-wrong-bet-on-market-volatility-annihilated-this-mutual-fund
Can you help answer these questions
Best Threads (Most Thanked)
April 9th, 2018, 07:22 PM
Houston TX
Legendary Market Wizard
Experience: Advanced
Platform: TT and Stellar
Broker: Advantage Futures
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
ron99
A story of what can happen if you don't have risk protection for your short ES puts.
CTAs had track record ruining Q1's.
April 9th, 2018, 08:40 PM
Madison, NJ
Experience: Intermediate
Platform: CQG/TOS
Broker: Optimus/CQG
Trading: ZN/TN/ES/NQ
Posts: 134 since Jun 2010
Thanks Given: 65
Thanks Received: 112
ron99
NexusFi mobile app
April 9th, 2018, 11:56 PM
Houston TX
Legendary Market Wizard
Experience: Advanced
Platform: TT and Stellar
Broker: Advantage Futures
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
shzhning
LJM sounds familiar, then it occurrs to me Enron CFO Andrew Fastow also set up a fund named LJM.
LJM (Lea Jeffrey Matthew) LJM, which stands for Lea, Jeffrey, Matthew, the names of Andrew Fastow's wife and children, was a company created in 1999 by Enron's CFO, Andrew Fastow, to buy Enron's poorly performing assets and bolster Enron's financial statements.
April 12th, 2018, 11:22 AM
Germany
Experience: Intermediate
Platform: TWS
Trading: Options on futures
Posts: 155 since Jul 2014
Thanks Given: 341
Thanks Received: 142
ron99
Victor Niederhoffer , who went bust twice with that strategy.
April 12th, 2018, 12:50 PM
BARCELONA/SPAIN
Posts: 33 since Sep 2013
Thanks Given: 2
Thanks Received: 2
Hi, Ron. I have a question about your put options -2 + 3 selling strategy. Sometimes I have the opportunity to make the strategy with options close 110 DTE and at the same time with options close to 95 DTE. The truth is that I do not know which of the two to choose. In these cases what factors have to be considered to decide between one or the other expiration?
April 13th, 2018, 11:53 AM
Cleveland, OH
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785
tinaturner
Hi, Ron. I have a question about your put options -2 + 3 selling strategy. Sometimes I have the opportunity to make the strategy with options close 110
DTE and at the same time with options close to 95 DTE. The truth is that I do not know which of the two to choose. In these cases what factors have to be considered to decide between one or the other expiration?
Thanks again
Ramon
April 16th, 2018, 12:53 PM
westhills california US
Posts: 94 since May 2015
Thanks Given: 131
Thanks Received: 20
On Jan 22 placed order: EWK3K8 P(-2)2230 and EWK3K8 P(+3)1940 x10 IM. Today after 83 days closed the contract at 75% premium drop. mROI=0.65
April 16th, 2018, 01:04 PM
Cleveland, OH
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785
rajab
On Jan 22 placed order: EWK3K8 P(-2)2230 and EWK3K8 P(+3)1940 x10 IM. Today after 83 days closed the
contract at 75%
premium drop. ROI=0.65
I don't know if I should wait to open a new contract or just ignore the geopolitics.
What are you guys doing?
Babak
April 17th, 2018, 02:04 PM
Cleveland, OH
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785
On March 12 I sold ESm8p2130(2x)p1840(3x) spread for 4.60. On April 17 I bought them back at 1.85. 36 days held. 2.4% MROI.
Last Updated on July 28, 2023
