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 1,951,546 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?

  #4521 (permalink)
 
vitrader's Avatar
 vitrader 
New York, New York, United States
 
Experience: Beginner
Platform: TOS
Trading: Options
Posts: 53 since Jul 2015
Thanks Given: 13
Thanks Received: 7


dvbattul View Post
Thanks, Ron. The table shows opening different strikes at 63/90/120DTEs. This is not what I meant. What I meant is adding to the same strike opened at 90 DTE but after 10/20 days ie at 80/70 DTE if position is still open but keeping same target of exiting at 50% of original premium at 90DTE. If after 10/20 days, ES is down you may require more cash for new additional options and if ES up then less cash and new premium may have increased or decreased accordingly.

Why is everyone so into selling OTM for "boring" account growth? You're generally risking 3 units to make 1/2 and then one or two losses will wipe out all of your winners. Am I missing something?

Reply With Quote

Can you help answer these questions
from other members on NexusFi?
Online prop firm The Funded Trader (TFT) going under?
Traders Hideout
New Micros: Ultra 10-Year & Ultra T-Bond -- Live Now
Treasury Notes and Bonds
Are there any eval firms that allow you to sink to your …
Traders Hideout
NT7 Indicator Script Troubleshooting - Camarilla Pivots
NinjaTrader
Exit Strategy
NinjaTrader
 
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
43 thanks
NexusFi site changelog and issues/problem reporting
24 thanks
GFIs1 1 DAX trade per day journal
22 thanks
The Program
19 thanks
  #4522 (permalink)
 kevinkdog   is a Vendor
 
Posts: 3,647 since Jul 2012
Thanks Given: 1,890
Thanks Received: 7,338


vitrader View Post
Why is everyone so into selling OTM for "boring" account growth? You're generally risking 3 units to make 1/2 and then one or two losses will wipe out all of your winners. Am I missing something?

yes you are

Follow me on Twitter Reply With Quote
Thanked by:
  #4523 (permalink)
 virileblood 
Singapore
 
Experience: Intermediate
Platform: TOS
Trading: ES
Posts: 13 since May 2015
Thanks Given: 26
Thanks Received: 13


Closed the Sept '15 1630 Puts (~50% winner). Managed to close 10 out of 12 contracts of the Sept'15 1650 Puts (~50% winner as well).

Current positions:


Looking to redeploy tonight.

Realised profit so far is +894.84 (net of commissions) since I started in June 15.

Reply With Quote
  #4524 (permalink)
Harvard16
Singapore
 
Posts: 43 since Sep 2012
Thanks Given: 57
Thanks Received: 70


kevinkdog View Post
yes you are

Well put KkD, made me chuckle.

Reply With Quote
  #4525 (permalink)
 rsm005 
vancouver BC/Canada
 
Experience: Beginner
Platform: Zaner360, OX
Broker: DeCaley
Trading: options
Posts: 264 since Jan 2015
Thanks Given: 13
Thanks Received: 205


virileblood View Post
Closed the Sept '15 1630 Puts (~50% winner). Managed to close 10 out of 12 contracts of the Sept'15 1650 Puts (~50% winner as well).

Current positions:


Looking to redeploy tonight.

Realised profit so far is +894.84 (net of commissions) since I started in June 15.


How long were these positions held open?
/rsm005/

Reply With Quote
  #4526 (permalink)
uuu1965
Riga Latvia
 
Posts: 107 since Jan 2013
Thanks Given: 441
Thanks Received: 72


blb014 View Post
I don't sell puts that far out of the money (around .10 to .20 delta) and not at that quantity or margin used. There are theta time decay graphs for around that delta, I would have to locate one.

Time decay will be accelerated on the front end for far out of the money options. I have sold the longer dated options before on equities and indices and I have found the sweet spot (for me) to be between 80 and 40 days, minimizing vega risk. Especially with futures with the amount money be leveraged. I look at it from a risk perspective. If I'm am leveraging 850,000; I am going have to get a decent premium, with less quantity and be in the trade for hopefully a shorter time period. And with a less margin being used, the ability to roll down if there is a vol pop or sudden gap down.

Having traded options through since 2006 with all the ups and down, that has shaped my perspective on risk. I embrace volatility and it is needed for premium sellers. I also respect it and analyze what if scenarios before I sell a put. If there is a vol pop or gap down would I be ok losing 14,000 or 750,000. Just a different perspective, I appreciate your perspective and this thread and your help for others.

Would you explain your approach with some example (does it mean that you didn`t trade when volatility is low)?
For my study the faster time decay for OTM options is ~ 90-60 days (for ITM last 30 days).

Reply With Quote
  #4527 (permalink)
 virileblood 
Singapore
 
Experience: Intermediate
Platform: TOS
Trading: ES
Posts: 13 since May 2015
Thanks Given: 26
Thanks Received: 13


rsm005 View Post
How long were these positions held open?
/rsm005/

Sold the 1630 Puts on June 22, and the 1650 Puts in clips between June 23 and June 25.. so they have been held for 22-24 days

Reply With Quote
  #4528 (permalink)
 rsm005 
vancouver BC/Canada
 
Experience: Beginner
Platform: Zaner360, OX
Broker: DeCaley
Trading: options
Posts: 264 since Jan 2015
Thanks Given: 13
Thanks Received: 205


ron99 View Post
Here is how my Sep IMx3 contracts performed



My IMx4 contracts made 2.7%.

I added some ESv15p1650 today. I also added some 1700-1500 spreads.

Ron,

What was the reasoning behind the spread? When do you decide to use those vs naked puts?

Thanks,
/rsm005/

Reply With Quote
  #4529 (permalink)
 
vitrader's Avatar
 vitrader 
New York, New York, United States
 
Experience: Beginner
Platform: TOS
Trading: Options
Posts: 53 since Jul 2015
Thanks Given: 13
Thanks Received: 7


kevinkdog View Post
yes you are

And what is that? The risk/reward ratio is horrible.

Reply With Quote
  #4530 (permalink)
 kevinkdog   is a Vendor
 
Posts: 3,647 since Jul 2012
Thanks Given: 1,890
Thanks Received: 7,338



vitrader View Post
And what is that? The risk/reward ratio is horrible.


The risk/reward is irrelevant, as a standalone statistic. That is true for all trading.

Win percentage is also irrelevant, as a standalone statistic.

Combine these two into expectancy, then you have something meaningful.

If you try to sell options in a way that produces negative expectancy, then I agree that is a terrible way to go.

Follow me on Twitter Reply With Quote
Thanked by:




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