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Selling Options on Futures?


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Selling Options on Futures?

  #2141 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
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Stan Dan View Post
Ups, very expensive for Self Directed Online - Standard and Self Directed Online - Pro.

Brokerage Commission Schedule

Any other ideas?

Those are round turn prices. The OX $3.50 is for a half turn. So $7.00 for a round turn.

Plus margins there are SPAN minimum. They aren't at OX for all commodities.

Lower margin is more important than a few dollars more in commissions when selling options. ROI will be higher with SPAN minimum margin and a few dollars more commissions.

For example, CLZ3 80p margin at OX is 258.72. SPAN is 215.60. With 2x cash excess OX margin & excess is 517. SPAN is 431.

ROI% at OX is 4.6% per month. If costs are the same, ROI% at a place with SPAN minimum margin ROI% is 5.5% per month. Almost 1% higher ROI% per month because of lower margin requirements. Who wouldn't want almost 12% higher ROI% per year just because of where you trade.

For 5 contracts at OX it takes $2585 margin and excess. For SPAN it takes $2155. For 6 it takes $2586. Same as 5 at OX.

So anything less than 12.66 in commissions would make you more money with SPAN margins instead of OX's 20% higher margins for CL.

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  #2142 (permalink)
 Stan Dan 
Zug / Switzerland
 
Posts: 67 since Sep 2013


ron99 View Post
Those are round turn prices. The OX $3.50 is for a half turn. So $7.00 for a round turn.

@ron99

I just had a look at OX. If there service and data are fine, never mind about the 7 Dollars. Quality has its price. I was thinking more of really discount brokers which offer options and futures. Any other idea on that?

Stan Dan

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  #2143 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
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Trading: Options on Futures
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Stan Dan View Post
@ron99

I just had a look at OX. If there service and data are fine, never mind about the 7 Dollars. Quality has its price. I was thinking more of really discount brokers which offer options and futures. Any other idea on that?

Stan Dan

I added more to my post above yours.

IB is cheapest but their margins are really sky high.

Open E Cry might be cheaper, depends on deal you make with them, but their quality is lower. They do charge overnight fee. Twenty cents per contract per night. They will drop it but then you have to pay them higher commission.
Futures Trading Platform, Futures Trading Demo, Electronic Trading System - OEC

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  #2144 (permalink)
BlueRoo
Brisbane, Queensland, Australia
 
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kevinkdog View Post
Here are some seasonal charts on December Lean Hogs:



Kevin, I have been looking long and hard at this chart. It seems that the chart converts price data into and oscillator (like RSI) and that it is bound between 0 and 100.

Could you let me know if you know this to be the case.

Thanks BlueRoo

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  #2145 (permalink)
 kevinkdog   is a Vendor
 
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BlueRoo View Post
Kevin, I have been looking long and hard at this chart. It seems that the chart converts price data into and oscillator (like RSI) and that it is bound between 0 and 100.

Could you let me know if you know this to be the case.

Thanks BlueRoo

Yes, that is what I see too. I don't know the specifics, but it probably scales everything, so that the min is 0, and max is 100. This lets you more easily compare years where price is radically different.

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  #2146 (permalink)
 
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 josh 
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kevinkdog View Post
Yes, that is what I see too. I don't know the specifics, but it probably scales everything, so that the min is 0, and max is 100. This lets you more easily compare years where price is radically different.

Unfortunately this only lets you compare the shape of the curves, and removes the magnitude component. So you can see if present prices are moving up with past prices, but you can't see if the degree is similar or not, for example.

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  #2147 (permalink)
 kevinkdog   is a Vendor
 
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josh View Post
Unfortunately this only lets you compare the shape of the curves, and removes the magnitude component. So you can see if present prices are moving up with past prices, but you can't see if the degree is similar or not, for example.

Right one year the difference between high and low might be 2 points, another year it might be 20. Yet they'd both show 0 to 100.

What the chart is good for is identifying general seasonal tendencies. If I know almost every year the low is in November, and the high is in March, I might use that info to help guide my option selling.

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  #2148 (permalink)
BlueRoo
Brisbane, Queensland, Australia
 
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KEVIN AND JOSH,

So the scale is limiting oscillator. I don't understand why they would do it this way. As Josh says it is important to determine proportional nature of price movement (Or at least this is how I think).

FOR EXAMPLE.

The lean hog chat Kevin posted shows a double bottom towards the end of the year. I have now test several variations of chart the same 5 year seasonal pattern for the Lean Hog October contract and while my chart looks similar there are key differences.

On an oscillator style chart high and lows in the underlying may not be the same level (equal).

For the way I am currently calculating seasonality on a percentile approach (in comparison to the chart Kevin posted) I get a lower low and higher low rather then equal double bottom.




PLEASE NOTE THIS WORK IS STILL UNDER DEVELOPMENT. All comments and constructive criticism welcome.

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  #2149 (permalink)
BlueRoo
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kevinkdog View Post
Right one year the difference between high and low might be 2 points, another year it might be 20. Yet they'd both show 0 to 100.

What the chart is good for is identifying general seasonal tendencies. If I know almost every year the low is in November, and the high is in March, I might use that info to help guide my option selling.

Yes. I am also thinking that seasonal charts can help me this way as well. But I would look to add some other points.

1. Identify when High and Lows occur (Kevin's observation).

2. Identify the nature of price action (volatility) as technically sound or erratic.

3. Identify the relationship of the current price level to that of the seasonal pattern.

Happy for others to add or reassess value and application of seasonal charts.

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  #2150 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
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ES margins increasing by 8.5% on Friday. Futures go from 3850 to 4180.

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