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Selling Options on Futures?
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Selling Options on Futures?

  #751 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
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FYI There are large sized bids in KCK3 190, 192.5 and 195 calls. One to two cents under settlement but futures are down 1.50.

I'm getting 2.4% ROI on them.

Edit. The bids on the 190s and 192.5s are gone. 195s are still there.
Edit. Now they all have been pulled.


Last edited by ron99; February 12th, 2013 at 09:20 AM. Reason: Bids gone
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  #752 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
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FWIW Central Plains drought again?

Warm, dry spring and a developing La Niña are forecast

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  #753 (permalink)
Trading for Fun
Reno, USA
 
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Finally took the plunge...had to at some point

Sold April 82 /CL puts for $100 margin is $662 currently. I took a delta of -.03 with a probability of expriring in the money of 3.61 %.

please critique this trade if its something you guys wouldnt have done.

thanks

V

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  #754 (permalink)
Market Wizard
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vmaiya73 View Post
Finally took the plunge...had to at some point

Sold April 82 /CL puts for $100 margin is $662 currently. I took a delta of -.03 with a probability of expriring in the money of 3.61 %.

please critique this trade if its something you guys wouldnt have done.

thanks

V

The seasonals are in your favor.

But for a first trade I would have suggested something less risky. A lower strike, especially in a fast moving commodity like CL. Or move to May to get the same dollars with a lower strike.

A May 73 last traded at .10 but the delta is lower than your Apr 82 at -.0175.

So keep a close watch on it and be ready to dump it if things change drastically.

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  #755 (permalink)
Trading for Fun
Reno, USA
 
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Ill keep an eye on it.

Thanks for the advise; next trade Ill analyze it more carefully.

V

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  #756 (permalink)
Trading for Fun
Houston, Texas
 
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vmaiya73 View Post
Finally took the plunge...had to at some point

Sold April 82 /CL puts for $100 margin is $662 currently. I took a delta of -.03 with a probability of expriring in the money of 3.61 %.

please critique this trade if its something you guys wouldnt have done.

thanks

V

I sold the May CL 75 puts last week at 0.19, the April 82 puts are closer to the money but you have less time to expiration. Seasonal charts are in your favor but like Ron said, need to keep an eye on it.

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  #757 (permalink)
Trading for Fun
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Opts,

What do you make of this grains sell off? Bummer that I did not sell the W calls late last week. Read the report that Ron posted concerning possible drought again this spring/summer. Might be a good idea to take a look at call spreads now that grains have sold off. Any thoughts?

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  #758 (permalink)
Elite Member
NW Florida
 
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MJ888 View Post
Opts,

What do you make of this grains sell off? Bummer that I did not sell the W calls late last week. Read the report that Ron posted concerning possible drought again this spring/summer. Might be a good idea to take a look at call spreads now that grains have sold off. Any thoughts?


I saw nothing but down per the chart I posted a week or so ago and the break of support here tells me prices might have no trouble heading to 700 so if I were going to go the call spread route I might want to wait. I just see more downside for wheat here. I'm heavy the 900 calls that expire 3/22 so I'm going to wait this out until those expire. I was also short the 680 puts but bought those back several days ago for a few $. The calls are pretty much deflated with premium right now because of the last few big move down days and the only way I would want to sell them is if there is some kind of short covering. The seasonal trend is pretty much down this time of year so I may take the approach 'selling the highs' for short calls but it may be several sessions before some of those way safe OTM's to be worth at least $50.....

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  #759 (permalink)
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Do you guys look for a minimum amount you would like to collect or concentrate more on ROI ?

Thanks

V

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  #760 (permalink)
Market Wizard
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vmaiya73 View Post
Do you guys look for a minimum amount you would like to collect or concentrate more on ROI ?

Thanks

V


For me, and I'm new at selling options, it is all about ROI. For me, this is a complete shift in my thinking from futures trading, where I focus on other metrics.

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