Selling Options on Futures?

June 4th, 2018, 03:57 PM

jefforey

Ron what is your opinion on silver strangle suggested by cordier
Silver. I am papertrading this.
Sold 1 x put1400March2019 @ 0.110 for $550
Sold 1 x call2200March2019 @ 0.120 for $600
Total premium collected is $1150.

I read about this suggestion, but I did not trade it.

March 2019 is far away. In case inflation rises, or in case the US$ loses, the Silver calls will get problems. The COT data is bullish, and, thus, the Silver price might rise fast, if it rises.

to me, risk / reward do not seem to be well balanced.

Best regards, Myrrdin

June 4th, 2018, 04:09 PM

I read in this weeks newsletter that far month options like the ones that are 6-8 months away are NOT accessible to retail. Is this true?

June 4th, 2018, 07:45 PM

I did put in a small position on the Cordier silver 14P/22C mainly because I don't believe inflation will be sustained and metrics recently came in higher, mainly due to crude rally.. again I could be totally wrong and as Myrrdin wrote, options are quite out on the future and the inflation could continue printing...

To Ron, Myrrdin and other seasoned posters on here: I'm having some issues with IB.. I use TOS, DeCarley and the link Ron had posted on ES deltas... The IB tws deltas are way off.. by almost 200 ES handles. Has anyone else noticed it? Wondering if there's an easier way to do this other than flipping between the platforms?

June 5th, 2018, 06:22 AM

jefforey

I read in this weeks newsletter that far month options like the ones that are 6-8 months away are NOT accessible to retail. Is this true?

No, I already sold many options 6 - 8 months away.

Best regards, Myrrdin

June 5th, 2018, 10:09 AM

In this weeks newsletter there is an interview of one of the clients Mr. Glen Roberts who says "i also don't have acess to the distant expiration months or deep out of the money strikes i wanted to trade". I wonder what he means by that?
https://hh206.infusionsoft.com/Download?Id=107328&inf_contact_key=592b1e1a5243ec2f00baccaffe9265176b8d8298e762e18bc9dd4807134e141e

June 5th, 2018, 12:58 PM

Narnar

For the crash in early 2015, with naked put @ 3 delta, the MM come out to 4.3 x IM for 81DTE and 3.7x IM for 109 DTE.
Somewhat similar with mid 2016, naked put @ 3 delta, see image attached. 3x, 2.1x, 1.9x for 77DTE, 105DTE, and 140DTE, respectively.

Note the annualized ROI is based on the MM above and not based on 5xIM.

Thanks.

You need to include the increase in premium in the Margin Factor calculation. Otherwise you will be on margin call even though you covered the increase in margin.

June 5th, 2018, 01:00 PM

jefforey

In this weeks newsletter there is an interview of one of the clients Mr. Glen Roberts who says "i also don't have acess to the distant expiration months or deep out of the money strikes i wanted to trade". I wonder what he means by that?
https://hh206.infusionsoft.com/Download?Id=107328&inf_contact_key=592b1e1a5243ec2f00baccaffe9265176b8d8298e762e18bc9dd4807134e141e

Some brokers limit what months you can trade options. The better ones don't.

June 5th, 2018, 01:07 PM

ys91

I did put in a small position on the Cordier silver 14P/22C mainly because I don't believe inflation will be sustained and metrics recently came in higher, mainly due to crude rally.. again I could be totally wrong and as Myrrdin wrote, options are quite out on the future and the inflation could continue printing...

To Ron, Myrrdin and other seasoned posters on here: I'm having some issues with IB.. I use TOS, DeCarley and the link Ron had posted on ES deltas... The IB tws deltas are way off.. by almost 200 ES handles. Has anyone else noticed it? Wondering if there's an easier way to do this other than flipping between the platforms?

We have warned traders about IB. Here's another reason not to use them.

Use the XLS-SPAN excel to get the deltas. It's in the PC-SPAN thread. Normally I don't look at current deltas unless huge move in futures.

June 5th, 2018, 01:21 PM

jefforey

Ron what is your opinion on silver strangle suggested by cordier. I am papertrading this.
Sold 1 x put1400March2019 @ 0.110 for $550 delta .08
Sold 1 x call2200March2019 @ 0.120 for $600 delta .09
Total premium collected is $1150. I believe the margin will be $2200. mRoi will be 5%.

I never trades options with this high DTE (266).

Time erosion of the premium is lower with high DTE. I find that around 90-110 DTE is the sweet spot for selling and catching the start of accelerating time erosion of the premium.

jefforey, have you read the entire thread yet? I'm sure we covered DTE in it.

June 5th, 2018, 02:37 PM

Narnar

For the crash in early 2015, with naked put @ 3 delta, the MM come out to 4.3 x IM for 81DTE and 3.7x IM for 109 DTE.
Somewhat similar with mid 2016, naked put @ 3 delta, see image attached. 3x, 2.1x, 1.9x for 77DTE, 105DTE, and 140DTE, respectively.

Note the annualized ROI is based on the MM above and not based on 5xIM.

Hi Ron,

I was able to get the file to work, but I am wondering if I am getting my calculation right for Margin Factor calculation.
Can you check what is your max MF for 1 by 2 spreads of ESQ8 P1075 (-1) and ESQ8 P975 (+2) from 20080501 to 20080801?

The data that I have are as follow:
Max Margin Requirement throughout the life of the positions = $487.00
IM during opening of the position = $87.50
Thus, to withstand the movement I have it at $487.00 / $87.50 = 5.6 MF (5.6xIM) during this period.

But this just doesn't seem right with the downward move that occurred. Perhaps it's because the data from 2008 are the first day of the month.

Thanks,
NN

Selling Options on Futures?

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Selling Options on Futures?