NexusFi: Find Your Edge


Home Menu

 





Selling Options on Futures?


Discussion in Options

Updated
      Top Posters
    1. looks_one ron99 with 2,221 posts (4,489 thanks)
    2. looks_two SMCJB with 346 posts (733 thanks)
    3. looks_3 kevinkdog with 341 posts (400 thanks)
    4. looks_4 myrrdin with 288 posts (408 thanks)
      Best Posters
    1. looks_one SMCJB with 2.1 thanks per post
    2. looks_two ron99 with 2 thanks per post
    3. looks_3 myrrdin with 1.4 thanks per post
    4. looks_4 kevinkdog with 1.2 thanks per post
    1. trending_up 1,935,494 views
    2. thumb_up 9,259 thanks given
    3. group 458 followers
    1. forum 7,370 posts
    2. attach_file 794 attachments




 
Search this Thread

Selling Options on Futures?

  #781 (permalink)
 britkid99 
Derby UK
 
Experience: Intermediate
Platform: Sierra Chart
Trading: Futures Options, CL
Posts: 175 since Jun 2009
Thanks Given: 105
Thanks Received: 134


MGBRoadster View Post
Hi there Brit, long time no speak.

Yep I’ve got an IB SIPP as well as a standard account with them. I mainly trade futures, but I’ve been branching out into options, mainly CL and ES. I’ve found short straddles are paying off pretty well recently, particularly on CL, but I don’t have historical options data, so I can’t backtest how much that’s due to current market conditions.

I’ve been selling a few options, but the problem with IB as you know, is the margin. I was just about to open an account with OX when they stopped supporting non-US clients, so I’m now looking into OEC. The research continues…

Really like the thread.

Say hello to the concrete cows for me.


Chris

(hint for non-UK readers: Google “Concrete cows Milton Keynes”)

Cows are fine currently residing in the shopping centre.
I tend to strangle to squeeze best value out of IB.
Check on my prior posts, where I mentioned Sucden Financial who may become an alternative to IB once they sort their options platform out.

Reply With Quote

Can you help answer these questions
from other members on NexusFi?
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
NexusFi Journal Challenge - April 2024
Feedback and Announcements
ZombieSqueeze
Platforms and Indicators
Request for MACD with option to use different MAs for fa …
NinjaTrader
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Retail Trading As An Industry
58 thanks
Battlestations: Show us your trading desks!
50 thanks
NexusFi site changelog and issues/problem reporting
47 thanks
GFIs1 1 DAX trade per day journal
31 thanks
What percentage per day is possible? [Poll]
31 thanks

  #782 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,322 since Jun 2009
Thanks Given: 33,143
Thanks Received: 101,476


sluhur View Post
Diversification. Hi all, I think it may have been discussed before on the previous thread. If it is, I apologize for that.

Fantastic webinar on risk and portfolio management from Ernest Chan:
Webinar: [AUTOLINK]Ernest Chan[/AUTOLINK] - Capital Allocation and Risk Management

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Reply With Quote
  #783 (permalink)
 ron99 
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



sluhur View Post
Hi all, I think it may have been discussed before on the previous thread. If it is, I apologize for that.

I'm pretty new to the commodity options and I've been trading CL and GC for a while.
I would like some more recommendation about other commodities that can be used for diversification in addition to CL and GC.

I noticed that some of you are trading KC and CT. Are they liquid?
As I read the book, it mention that not all the commodities are liquid.
By looking at the seasonal, is it ok now to sell put on CT?

Thank you for all your advice

ES is another option with high volume. The ROI isn't the greatest. But if I have an account with excess available I will sell ES puts to fill it up. You can't get far enough OTM on ES calls to be low risk and have enough premium to be worth trading, so I don't trade those. EW (ES end of month options) are OK but low volume.

SB has decent volume.

NG, RB & HO are OK.

Started this thread Reply With Quote
  #784 (permalink)
 
Big Mike's Avatar
 Big Mike 
Manta, Ecuador
Site Administrator
Developer
Swing Trader
 
Experience: Advanced
Platform: Custom solution
Broker: IBKR
Trading: Stocks & Futures
Frequency: Every few days
Duration: Weeks
Posts: 50,322 since Jun 2009
Thanks Given: 33,143
Thanks Received: 101,476

Got this today from OptionsXpress


Quoting 
Good news! We've removed the pricing tiers on our futures contracts to create an easy to understand pricing structure.

$3.50 per contract on Futures and Futures Options Trades.
Effective immediately, your commission rate on all futures and futures options contracts is reduced to $3.50/contract

Mike

We're here to help: just ask the community or contact our Help Desk

Quick Links: Change your Username or Register as a Vendor
Searching for trading reviews? Review this list
Lifetime Elite Membership: Sign-up for only $149 USD
Exclusive money saving offers from our Site Sponsors: Browse Offers
Report problems with the site: Using the NexusFi changelog thread
Follow me on Twitter Visit my NexusFi Trade Journal Reply With Quote
  #785 (permalink)
 ron99 
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

Dudetooth,

I was going to type a long reply but others have made excellent, thoughtful responses to you.

I will say I understand why you had success with selling options and then moved to other strategies. I have done the same thing over and over too many times. It's usually a combination of boredom and/or greed. Especially for me since this is my full time "job".

But I always come back to selling options.

On the broker saying you are too risky. I have had that several times. Last time was at FC Stone. I had 88% cash and they told me my positions were too risky and that I HAD to close some of them. I closed my account immediately. Of course that was right after they had a person crash and he was on the hook for over $1 mil. They should have been managing him much closer. And of course he wasn't in options.

OX only calls me when things go severely wrong. Other than that they haven't said boo about selling options. OEC was a little more worried but after they saw my track record there they have been OK. But I haven't had to increase my options there since they were purchased.

I have one IRA account that has 64k in it. It currently has 233 options in it and is at 33.5% margin. 8 different commodities. 124 of those options expire in 12 days. It's up 7.8% this year. When those options expire it will be up 9.3%.

Started this thread Reply With Quote
The following 7 users say Thank You to ron99 for this post:
  #786 (permalink)
MGBRoadster
Lancashire UK
 
Posts: 52 since Jan 2013
Thanks Given: 42
Thanks Received: 32


britkid99 View Post
I tend to strangle to squeeze best value out of IB.
Check on my prior posts, where I mentioned Sucden Financial who may become an alternative to IB once they sort their options platform out.

I saw your posts about Sucden, thanks. If they come through on their promises then everything would be honky dory.

I’ve only had a quick look at the effect of strangling on margin at IB but it didn’t seem to boost the ROI enough to make it worth the effort. I’ll put it on the list to do some more research.

That list keeps getting longer…

Reply With Quote
  #787 (permalink)
 ron99 
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

According to the National Cotton Council’s annual survey, as of January 1, U.S. cotton producers planned to plant 9.01 million acres of cotton this spring, a 26.8 percent drop from 2012 acreage.

Cotton Producers to Slash Acreage

Started this thread Reply With Quote
  #788 (permalink)
 Selim 
Voula -- Athens,Greece
 
Experience: Beginner
Platform: Saxo
Trading: Oil
Posts: 26 since Jan 2013
Thanks Given: 1
Thanks Received: 0

Hey Ron. I will be starting next month trading options with sucden international I just have a few questions. Which commodities do you actively trade which ones should I avoid? James cordier states that he sells 500 dollar options and not the 200s. You stated that selling far otm options has an easier chance of doubling can you explain the difference I don't understand that and cordier says he looks for options that have double margin to premium. Am I to understand that selling far otm options have higher margins to premium, can you give me an example. Thanks

Reply With Quote
  #789 (permalink)
 Dudetooth 
Steubenville Ohio
 
Experience: Intermediate
Platform: OX, OEC, RJO
Trading: Options on Futures
Posts: 266 since Sep 2012
Thanks Given: 30
Thanks Received: 274


britkid99 View Post
Would you be willing to name your broker and give his commission charges as it will help to add knowledge to others seeking information of option unfriendly brokers.

Brit

One of my accounts is with OX. I also have one with OEC and one with RJO. Both the OEC and RJO have Daniels Trading as the IB. Commissions were $20 RT on the RJO (set up with them 6 years ago and never looked to get lower ... until now) and $3 RT for the OEC. I wouldn't say that they were unfriendly to options sellers, it just seemed odd that my broker had no issues with the way I was trading, no issues with me just selling options in either account. When I asked for lower commissions he wanted to put both accounts at $10 RT. It's when I mentioned I could get lower commissions at another IB that he told me that he had an issue with my risk.

Clearing through RJO has been fine for selling options. I've never had an issue. You might find it difficult to get discount commissions at Daniels, but there are other IBs that I ran across as low as $4 RT. Their webtrade and desktop software are pretty option-friendly ... actually pretty decent for free platforms. Looks like they have an RJO Canada and RJO UK as well.

Hope that helps.

Reply With Quote
  #790 (permalink)
 ron99 
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



Dudetooth View Post
One of my accounts is with OX. I also have one with OEC and one with RJO. Both the OEC and RJO have Daniels Trading as the IB. Commissions were $20 RT on the RJO (set up with them 6 years ago and never looked to get lower ... until now) and $3 RT for the OEC. I wouldn't say that they were unfriendly to options sellers, it just seemed odd that my broker had no issues with the way I was trading, no issues with me just selling options in either account. When I asked for lower commissions he wanted to put both accounts at $10 RT. It's when I mentioned I could get lower commissions at another IB that he told me that he had an issue with my risk.

Clearing through RJO has been fine for selling options. I've never had an issue. You might find it difficult to get discount commissions at Daniels, but there are other IBs that I ran across as low as $4 RT. Their webtrade and desktop software are pretty option-friendly ... actually pretty decent for free platforms. Looks like they have an RJO Canada and RJO UK as well.

Hope that helps.

I trade at OEC. Went direct to them. No IB.

Started this thread Reply With Quote





Last Updated on July 28, 2023


© 2024 NexusFi™, s.a., All Rights Reserved.
Av Ricardo J. Alfaro, Century Tower, Panama City, Panama, Ph: +507 833-9432 (Panama and Intl), +1 888-312-3001 (USA and Canada)
All information is for educational use only and is not investment advice. There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
About Us - Contact Us - Site Rules, Acceptable Use, and Terms and Conditions - Privacy Policy - Downloads - Top
no new posts