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Thank you for your generous sharing. It is a great strategy, I am collecting very low premium on selling ES put now b/c of the low vix recently, it is great to try a new strategy.
Can you help answer these questions from other members on NexusFi?
I read that IB isn't option seller friendly. I'm probably beating a dead horse or missing something. However, I have a portfolio margin account, which gives 4x buying power couldn't I use the buying power to mitigate the issue?
For example, on April 24, a Q2015 ES put @ 1600 has a SPAN IM of USD 594. IB's IM is ~ USD 1800.
They also have a fee imposed for large 'worst case scenario' losses on position (regardless if spread, wide spreads etc). on my account right now for example, selling 10 June1900 puts on ES for 6 points (at 6.9 delta right now), you would be charged $2.74 per day the position is open. have to gripe again about this, it tends to add up quick
I used my stock account at IB for a while to sell options on futures. But obviously IB does not have any interest in option selling, and does everything to prevent their customers from selling options.
I moved my account for selling options on futures. ( I do not trade options on stocks.) The main reasons were:
High margin for naked short options.
Some thin OTM options in the commodities are not tradable.
Incorrect calculation of account value, which led to forced liquidation. Value of short options is calculated intraday as the value to buy them back via a market order. (Liquidated positions were bought back by IB at their cost.)
2 questions for the more seasoned traders out here./
1. How much have you see the dollar affect commodities prices? Enough to counteract fundamentals?
2. When you all calculate annual ROI do you only use the amount of cash that's set aside for reserves or the entire value of the account? If 60% of the account is in cash in the event of a margin rush is it bad math to use that dollar amount when calculating your ROI?
