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 1,950,287 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?

  #481 (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


psears View Post
Hey does anybody have any thoughts on today's corn action? It would be great if someone with access to a good quote screen could fill us newbie's in on the changes in volatility and pricing that occurred from yesterday to today. Considering the size of the spike and how it reversed direction, it should have shaken things up quite a bit! This may make a good case study of why it is important to be selling far out of the money.

Thoughts?

Corn normally goes up in Jan and Feb right after this report.

Even though Mar corn settled 10.00 higher the Mar corn calls above 7.00 settled lower???

Started this thread Reply With Quote

Can you help answer these questions
from other members on NexusFi?
New Micros: Ultra 10-Year & Ultra T-Bond -- Live Now
Treasury Notes and Bonds
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
ZombieSqueeze
Platforms and Indicators
Are there any eval firms that allow you to sink to your …
Traders Hideout
 
Best Threads (Most Thanked)
in the last 7 days on NexusFi
Get funded firms 2023/2024 - Any recommendations or word …
60 thanks
Funded Trader platforms
37 thanks
NexusFi site changelog and issues/problem reporting
24 thanks
GFIs1 1 DAX trade per day journal
22 thanks
The Program
19 thanks
  #482 (permalink)
 
opts's Avatar
 opts 
NW Florida
 
Experience: Intermediate
Platform: OX and TOS
Trading: Futures Options, Stocks
Posts: 234 since Aug 2012
Thanks Given: 29
Thanks Received: 115

shane: I have been using OX for several years and have no complaints aside from their charts which are very average. Barchart or Ninjatrader (free) is all I need.

Pears:

Take a look here

https://www.ccstrade.com/futures/seasonal/

Very important stuff here for seasonal tendencies.

As for the grains: the crop progress report came out today with a bullish bias. However corn (May in particular) settled about 14 cents below the reaction high. The current price is almost at the 50% retracement level. The seasonal tendency for corn this time of year is for prices to be range-bound, pull back towards July, then move up in the summer.

My 2 cents is still range-bound here. I'm giving the grains a few more days to digest this news and see how this snow front will affect wheat prices too. No worries, selling options gives you plenty of time to decide what to do....pun very well intended here.

Reply With Quote
Thanked by:
  #483 (permalink)
MJ888
Houston, Texas
 
Posts: 165 since Sep 2012
Thanks Given: 37
Thanks Received: 150



ron99 View Post
I'm surprised they gave you the lower rate as a new customer. I guess I should have asked sooner when I moved there!

Yeah, I am delighted too and didn't think OX would go that low. But I did start the conversation by telling them that I only pay a flat rate of $2.32 at IB and that is also inclusive of all fees and paying $12.99 plus fees is unjustified no matter how great the services were at OX. They put me on hold for a few minutes and then came back with $3.99 no strings attached. I am glad I asked.

Reply With Quote
Thanked by:
  #484 (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


opts View Post
shane: I have been using OX for several years and have no complaints aside from their charts which are very average. Barchart or Ninjatrader (free) is all I need.

Pears:

Take a look here

https://www.ccstrade.com/futures/seasonal/

Very important stuff here for seasonal tendencies.

As for the grains: the crop progress report came out today with a bullish bias. However corn (May in particular) settled about 14 cents below the reaction high. The current price is almost at the 50% retracement level. The seasonal tendency for corn this time of year is for prices to be range-bound, pull back towards July, then move up in the summer.

My 2 cents is still range-bound here. I'm giving the grains a few more days to digest this news and see how this snow front will affect wheat prices too. No worries, selling options gives you plenty of time to decide what to do....pun very well intended here.

In 2012 Mar corn was down 40 cents on the bearish report on Jan 12th. The next day it was down 12 more cents. From that point to the end of Feb it was up 54 cents even though there was a bearish report.

In 2011 Mar corn was up 24 cents on a bullish report. From 1/12 to 2/25 Mar corn was up 81 more cents.

Corn OI gained 80-90,000 in those 6 weeks. Hedging and speculating for the new year.

With the bullish report, I can easily see corn running higher for 6 weeks.

Started this thread Reply With Quote
Thanked by:
  #485 (permalink)
MJ888
Houston, Texas
 
Posts: 165 since Sep 2012
Thanks Given: 37
Thanks Received: 150


opts View Post
As for the grains: the crop progress report came out today with a bullish bias. However corn (May in particular) settled about 14 cents below the reaction high. The current price is almost at the 50% retracement level. The seasonal tendency for corn this time of year is for prices to be range-bound, pull back towards July, then move up in the summer.

My 2 cents is still range-bound here. I'm giving the grains a few more days to digest this news and see how this snow front will affect wheat prices too. No worries, selling options gives you plenty of time to decide what to do....pun very well intended here.

I am considering selling some May corn calls, particularly strikes above 850, even 900

Reply With Quote
Thanked by:
  #486 (permalink)
Raven
Huntsville AL/USA
 
Posts: 54 since May 2012
Thanks Given: 80
Thanks Received: 26


MJ888 View Post
Yeah, I am delighted too and didn't think OX would go that low. But I did start the conversation by telling them that I only pay a flat rate of $2.32 at IB and that is also inclusive of all fees and paying $12.99 plus fees is unjustified no matter how great the services were at OX. They put me on hold for a few minutes and then came back with $3.99 no strings attached. I am glad I asked.

That is great. I called and negotiated with them about a year ago. The gave me $6.99 per contract. I really like OX. I have two accounts with them and their customer service is top notch.

I am having one problem right now with the trade calculator. It works for a market order but if I type in a limit price it won't work. I never place market orders.

Reply With Quote
  #487 (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


Raven View Post
That is great. I called and negotiated with them about a year ago. The gave me $6.99 per contract. I really like OX. I have two accounts with them and their customer service is top notch.

I am having one problem right now with the trade calculator. It works for a market order but if I type in a limit price it won't work. I never place market orders.

I leave the market price line checked and click calculate. If you then hit the Trade Now button it will bring up the correct futures options order form. If you click on the bid price, if that is the price you want to sell the option, it puts that price in the limit price box.

I suspect the limit price on trade calc are for something other than futures options.

Started this thread Reply With Quote
  #488 (permalink)
 britkid99 
Derby UK
 
Experience: Intermediate
Platform: Sierra Chart
Trading: Futures Options, CL
Posts: 175 since Jun 2009
Thanks Given: 105
Thanks Received: 134

I have said previously that I was bullish on Oil and twice bought calls which made a couple of dollars each.
The reason for my bullish mode can be seen from the chart below.

There was massive buying in October when consolidating at the 90-95 range. These buyers mainly held despite the crash down to 85's where they rebought or new buyers entered.

The subsequent pushes to 90 have been met with selling creating a distribution effect. The resolution of the Fiscal Cliff has rocketed prices as high as 94. At the same time the selling has continued and the volume delta has now touched the blue line. From a delta analysis point of view this says that the buyers from the lows at 85 have mainly covered their longs, or an inventory grab has occured.

This means we need new buyers to come in (or sellers to buy to cover) for prices to move on up. There aren't many sellers holding shorts as much of the selling was long covering. What there still is though, is 40000 buyers holding from the 90-95's area, so they are basically at break even at the moment.

It maybe they are long term bulls waiting for the 100's. I would expect some further consolidation in this range and it will be interesting to see if the delta bleeds off further or a seaonal dip down is bought into.

On a personal note I missed the latest advance due to fiscal cliff worries so I would love to see a pull back to 90-91 area, resistance becoming support, as an area to buy calls again or at least sell puts.

Thoughts anyone?
Brit

Attached Thumbnails
Click image for larger version

Name:	oil big picture.JPG
Views:	223
Size:	193.3 KB
ID:	99412  
Reply With Quote
  #489 (permalink)
 crez 
Brisbane , Australia
 
Experience: Intermediate
Platform: NT, OX
Trading: Futures
Posts: 51 since Sep 2009
Thanks Given: 32
Thanks Received: 13

[/ATTACH]




Hey Brit, pretty much agree with your analysis..... I'll be looking for a close above 95 with targets of 100 to get long. There were some decent pushes from 92.50 last week.

Enjoying everyone's thinking in this thread. I am fairly new to options, but am impressed with what I have researched so far.

Cheers

Crez

Reply With Quote
Thanked by:
  #490 (permalink)
psears
Richmond, VA/USA
 
Posts: 35 since Nov 2012
Thanks Given: 3
Thanks Received: 11


Hey Ron99 and anyone else who is doing this full time,

I was wondering how big of a bank roll one would likely need to be able to do this full time and make $100,000/yr.

Also wondering if anyone thinks a hedge fund could could be started based on selling OTM options as is discussed here?

Thanks!

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