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Interesting points, especially about the vacation . Now that I no longer live in the US I realize how seriously the rest of the world takes their time off.
Starting with this trade I'm probably going to run a few experiments to see what happens. I have a good idea base on the theory and math already presented but I'd like to "see it with my own eyes".
1. I'd like to open 2 trades, one at 90+ days and one at 120+ days at the same strike, P1750, and see which expires first and by how much.
2. Open a trade at 90+ days and with a spread and a trade at 120+ days with a spread and see how that affects my blood pressure.
On Monday I'll start exercise one and post it up here.
/rsm005/
Can you help answer these questions from other members on NexusFi?
June /ES option trades below. I trade small lots especially on a highly leveraged instrument. Less than .20 delta on the options sold. Selling into weakness, closing the position if the option value decreases in short period of time or >50% decay in premium. …
Ron, It's relative depending on account size but in IMO opinion selling 2000 1650 puts has much more risk of a substantial drawdown or getting wiped out than 10 1900 puts.
From TOS analyze tab:
10 1900 Aug Put 6% drop -14,870
Fortunate on timing on this trade. Like Ron, I'm not a believer in timing the market but I do like to sell puts when IV is rising.
I will be looking to sell 10 1900 Sept puts leveraging 950,000. Possibly more puts if there is Vol. pop but would …
I did sell some lower delta just to see how they performed.
With the gap down after Greece, I sold more than usual. Sometimes I will wait to open positions but I'm not a big believer in trying to time the market but if a opportunity arises like the recent greece and china situation, I will sell into weakness. I don't sell the quantity or use the amount of margin (IM*3)
Volatility is good for the market and trading. The US economy is hitting on full cylinders, Greece has been going on for five years, and even though the Shanghai index has fell drastically it is still positive for 2015. Will we have a correction? maybe …
I'm almost 60 years old so I am more worried about preserving retirement money than you youngsters here. Younger people don't need to be as risk adverse as I am with some of my money.
1. You should add a third position that is the same delta as the 90+ day for 120+
I made a similar experment some time ago. Sold ES puts of two subsequent months, delta approx. 0.03, approx. 80 and 110 DTE at the same price. They were liquidated at 50 % within a few minutes. (I am aware that one example does not mean it will always happen this way.)
What's your read on Cotton for the medium term? I've found that market to be extraordinarily erratic to say the least for the past couple of months!
If ever an example of why you need to be selling deep out of the money is needed then Cotton for the past 2 months is the exemplar!
I've ended up strangling it with both short puts and calls myself. However I think I may need to lift the calls asap! I've already bled a large chunk of the premium from it so it's all good!
I hold the short CTZ C75 and CTZ P60 for some weeks, after selling and liquidating some other puts and calls profitable since early 2015. I added a small lot of short CTU C68 immediately after the bearish USDA report this week.
There is enough cotton in the world to prevent prices rising to 70 or higher. But still there are situations - eg. adverse weather, US$ getting cheaper - when prices move up significantly, and you get a good price for your calls. On the other hand, there is a lower price band - for some months in the range of 63 US$ - where consumers start buying cotton. A good place to sell puts.
For the coming weeks, prices should come down a bit due to the USDA report and the US$ moving up.
What worries me a little bit is el Nino. This weather phenomenon leads to dryness in parts of Asia, eg. India, where a lot of cotton is produced. Thus, there might come a time when it is better to liquidate the calls.
. Now that I no longer live in the US I realize how seriously the rest of the world takes their time off. 
Younger people don't need to be as risk adverse as I am with some of my money.
