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wow... this is indeed a very great forum with many interesting posts on futures options! I am very glad to have found this forum as there aren't many out there which talk about future options so extensively!
hi all in this forum, I have been selling options for a number of years, starting out with stock options initially and then moved into futures options, ES. also doing commodities options like grains, energy, etc.
I am glad to find a forum of traders selling options. As probably many of you, I was made aware of this topic some years ago reading the book of Cordier & Gross. I trade more or less according to their suggestions, but there are exceptions. Main exception is that in cases where I have a clear opinion of the next move I also sell close to the money options. But this is only a small share of my portfolio. And in some cases I go beyond half a year of time left until expiry.
I would appreciate to discuss current and future positions here. Currently I hold
Has anyone had good or bad experiences with trying to hedge deep out of the money puts with a short future contract(s) in order to mitigate delta (minimize delta)? Thanks in advance.
As I mentioned usually some of my positions are ITM or ATM in case I have a very strong opinion concerning a market and the volatility is not sufficient to get satisfying premium (eg. currently cotton). Most of the time the number of these positions is smaller than currently.
Usually I enter positions betwees 300 and 1000 US$ per option, and delta of 0.1 - 0.2. I never trade very "cheap" options of less than 100 US$, as the number of options for a position would get too big, and, thus, the risk in case of a surprising move to the wrong direction would be significant.
Would you like to share some of your current favourite positions ?
I am aware that this thread is based on the ideas of Cordier & Gross. And I like these ideas, and most of my option selling trades since around 2005 were according to their concept. But I thought it might be interesting for some traders here to read about other concepts of selling options, which I applied successful in recent years. Anyway, in future I will only communicate and discuss trade ideas within the frame of Cordier & Gross. I hope that is ok for you.
Cordier & Gross suggest to sell options with deltas lower than 0.20 (=20 %). Thus, the trades I would like to discuss here (and I hope you allow for a small tolerance concerning delta) are
SN15 C1200
WH15 C600
NGH15 C7
I am looking forward to an interesting and fruitful discussion on these and other option selling trades.
