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Selling Options on Futures?


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Selling Options on Futures?

  #751 (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

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.

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  #752 (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

FWIW Central Plains drought again?

Warm, dry spring and a developing La Niña are forecast

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  #753 (permalink)
vmaiya73
Salt Lake City, USA
 
Posts: 88 since Jul 2011
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Thanks Received: 62


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)
 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


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)
vmaiya73
Salt Lake City, USA
 
Posts: 88 since Jul 2011
Thanks Given: 34
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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)
MJ888
Houston, Texas
 
Posts: 165 since Sep 2012
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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)
MJ888
Houston, Texas
 
Posts: 165 since Sep 2012
Thanks Given: 37
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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)
 
opts's Avatar
 opts 
NW Florida
 
Experience: Intermediate
Platform: OX and TOS
Trading: Futures Options, Stocks
Posts: 234 since Aug 2012
Thanks Given: 29
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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)
vmaiya73
Salt Lake City, USA
 
Posts: 88 since Jul 2011
Thanks Given: 34
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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)
 kevinkdog   is a Vendor
 
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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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