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Selling Options on Futures?
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Selling Options on Futures?

  #7091 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
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Forex37 View Post
Thanks Ron,

but how to place at ZANER/ Gain / DeCarley a pending order for closing this trade? If I place the offsetting order (closing at 2.30 debit) I can not use a stop order, only either market or limit. If I choose LIMIT, will it be closed at any price above 2.30 or below 2.30?

Thanks

It does not make sense to place stop orders for options. Stop orders become market orders at the time when the stop price is hit. As OTM options are rarely traded the fill cannot be predicted. Significant losses can be the consequence.

You have to watch the trade and close it using a limit order, place when the price of the option has reached the target.

Best regards, Myrrdin

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  #7092 (permalink)
Cleveland, OH
 
Trading Experience: Advanced
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Forex37 View Post
Thanks Ron,

but how to place at ZANER/ Gain / DeCarley a pending order for closing this trade? If I place the offsetting order (closing at 2.30 debit) I can not use a stop order, only either market or limit. If I choose LIMIT, will it be closed at any price above 2.30 or below 2.30?

Thanks

I don't think you can place one order for a 2x3 put spread on Zaner. If you could you would place a GTC limit order to buy at 2.30. It will fill at 2.30. Never higher.

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  #7093 (permalink)
Cleveland, OH
 
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Effective Thu Apr 18, ES margin is increasing 5% for non-members.

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  #7094 (permalink)
Strasbourg, France
 
Trading Experience: Advanced
Platform: ProRealTime
Broker/Data: SaxoBank, IG Market
Favorite Futures: Brent, Gold, Silver, Cocoa, Coffee C, Platinum, Cotton, Lean Hogs, Natural Gas, Copper, Soybeans
 
Sagal's Avatar
 
Posts: 53 since Mar 2019
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I am almost coming to the conclusion that selling spread options on a diversified way on commodities is hardly profitable for me.
Is there anyone trading the collateral to protect the naked options on commodities in the case of a reverse move not expected and supposedly of short duration or have you reached already the conclusions that it is as well hardly profitable? I know that your recommendation is more to take profit at 50%...One does not prevent the other...

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  #7095 (permalink)
Strasbourg, France
 
Trading Experience: Advanced
Platform: ProRealTime
Broker/Data: SaxoBank, IG Market
Favorite Futures: Brent, Gold, Silver, Cocoa, Coffee C, Platinum, Cotton, Lean Hogs, Natural Gas, Copper, Soybeans
 
Sagal's Avatar
 
Posts: 53 since Mar 2019
Thanks: 17 given, 43 received

Not helpful guys...I will more rarely come and intervene as there are not enough exchanges on the topics I am interested in (I am talking as well of exchange of ideas or information on commodities on the other topics of this forum; not that I found better forums but let's go back to solitary...).
I will answer my own question and leave you there:
On paper it could sound nice but in practice and particularly for the commodities that are expensive (silver 5000$ /point) it is too difficult to manipulate. One example: I lost on 3 and 4 January the premiums of one naked put and one spread put option in less than 12 hours on Copper trying to protect my naked position. Ok if cooper prices would have plunged for a long period I was protected my assets but...it is rarely a winning strategy.
PS I will change my strategy as the previous one is not successful in the current environment.


Last edited by Sagal; April 28th, 2019 at 10:22 AM. Reason: Remove "too risky"
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  #7096 (permalink)
Zurich
 
Trading Experience: Advanced
Platform: IB
Favorite Futures: Futures
 
Posts: 29 since Jun 2011
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education regarding writing options on commodities

Can anyone recommend a source for education on writing options on commodities beside Carley's basic books?

Thanks in advance

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  #7097 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
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swisstrader321 View Post
Can anyone recommend a source for education on writing options on commodities beside Carley's basic books?

Thanks in advance

I am not sure if you speak German. Jens Rabe has written books on option selling and also operates an interesting Youtube channel. Both are well suited for beginners and less for experienced traders.

Lawrence McMillan has written interesting books on optoin theory.

Best regards, Myrrdin

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  #7098 (permalink)
Hannover Germany
 
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... though their company has gone bankrupt

IŽd nevertheless recommend their book as an excellent source for basic trading in commodities futures options: James Cordier & Michael Gross: the complete guide to option selling.

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  #7099 (permalink)
Zurich
 
Trading Experience: Advanced
Platform: IB
Favorite Futures: Futures
 
Posts: 29 since Jun 2011
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MGGer View Post
IŽd nevertheless recommend their book as an excellent source for basic trading in commodities futures options: James Cordier & Michael Gross: the complete guide to option selling.

Thanks, I'll check it out. I'm sure it's a good read. Too bad they did't follow their own advice I guess.

Thanks for the tip

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  #7100 (permalink)
Legendary the coin hunter
virginia
 
Trading Experience: Intermediate
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MGGer View Post
IŽd nevertheless recommend their book as an excellent source for basic trading in commodities futures options: James Cordier & Michael Gross: the complete guide to option selling.

As a human James Cordier was tired and bored of putting on the same trade year after year, once he though he could get way with less expensive trade then thing just blew up in a hurry. The raise of robot will take care of that, it will not not get tire or bore of doing the same trade year after year.

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