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Selling Options on Futures?


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Selling Options on Futures?

  #4741 (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

All,

Opened.

Contract: OESX5 P1700
Quantity: 100
Premium: $4.15
Days to Expiration at Open: 95
Initial Margin: $800
Days Open: 0

Contract: OEWX5 P1650
Quantity: 45
Premium: $2.90
Days to Expiration at Open: 95
Initial Margin: $608
Days Open: 0

I will exit this trade in the first week of Sept. no matter what. I don't want to have any positions on during the fed meetings because of the pending interest rate hike.

Thanks,
/rsm005/

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  #4742 (permalink)
Chubbly
Ottawa
 
Posts: 87 since May 2015
Thanks Given: 67
Thanks Received: 88


rsm005 View Post
All,

Opened.

Contract: OESX5 P1700
Quantity: 100
Premium: $4.15
Days to Expiration at Open: 95
Initial Margin: $800
Days Open: 0

Contract: OEWX5 P1650
Quantity: 45
Premium: $2.90
Days to Expiration at Open: 95
Initial Margin: $608
Days Open: 0

I will exit this trade in the first week of Sept. no matter what. I don't want to have any positions on during the fed meetings because of the pending interest rate hike.

Thanks,
/rsm005/

Why not trade through and change your IMx3 to an IMx4 or even IMx5?

I think it will cause a disruption just like the yuan news last week did but it won't cause a crash. But then again nobody really knows the future

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  #4743 (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



Chubbly View Post
Why not trade through and change your IMx3 to an IMx4 or even IMx5?

I think it will cause a disruption just like the yuan news last week did but it won't cause a crash. But then again nobody really knows the future

My thought process here is pretty simple, this will be the first interest rate hike in 5+ years so there's just no telling how the market will react and with how much force. The bears have had a lot of chances and reasons to trigger a correction but this one, in my opinion, is the strongest justification yet and I am just more comfortable on the sidelines.

/rsm005/

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  #4744 (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

One observation on this trade which may or may not hold true as it continues to mature.

P1700 seems to lose value faster than P1650 in a market move. Not sure why maybe someone who has more experience can shed light on why.

/rsm005/

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  #4745 (permalink)
 virileblood 
Singapore
 
Experience: Intermediate
Platform: TOS
Trading: ES
Posts: 13 since May 2015
Thanks Given: 26
Thanks Received: 13

Since the delta of the P1700 is higher (in absolute terms), when the market moves up, it will lose value more quickly than an option with a lower delta (P1650), all else being equal.

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  #4746 (permalink)
cnncurt
Phoenix, AZ/USA
 
Posts: 8 since Oct 2013
Thanks Given: 2
Thanks Received: 10


Chubbly View Post
Why not trade through and change your IMx3 to an IMx4 or even IMx5?

I think it will cause a disruption just like the yuan news last week did but it won't cause a crash. But then again nobody really knows the future

My feeling is that the interest rate hike in September is already priced in to the market, as it has been telegraphed for quite a while now. The Yuan news took everybody by surprise.

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  #4747 (permalink)
 
CobblersAwls's Avatar
 CobblersAwls 
London, United Kingdom
 
Experience: Intermediate
Platform: N/A
Broker: Bloomberg
Trading: Energies
Posts: 310 since Jul 2014
Thanks Given: 1,089
Thanks Received: 386


cnncurt View Post
My feeling is that the interest rate hike in September is already priced in to the market, as it has been telegraphed for quite a while now. The Yuan news took everybody by surprise.

I disagree. I would say that people are finally coming to terms with it, but that even still there are doubts we will see a rate rise in september. The first initial rate move itself will bring a modest move, but it will be the confirmation of continued rate rises past the initial one that will hit the hardest.

Just looking at the DXY, it's still not even above it's 52 week high. Bonds/Notes are still not convinced either, with 10s trading in the middle of the yearly range - to me that doesn't indicate 'priced in'.

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  #4748 (permalink)
cnncurt
Phoenix, AZ/USA
 
Posts: 8 since Oct 2013
Thanks Given: 2
Thanks Received: 10

Good points. All I know with certainty is that every time I try predicting the future, I'm wrong.

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  #4749 (permalink)
 gfmatt 
Edmonton, Alberta
 
Experience: Advanced
Platform: IB
Trading: nq
Posts: 55 since Jan 2012
Thanks Given: 29
Thanks Received: 60


cnncurt View Post
Good points. All I know with certainty is that every time I try predicting the future, I'm wrong.

Indeed. If traders got out of the predicting game, they'd be a lot richer.

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  #4750 (permalink)
uuu1965
Riga Latvia
 
Posts: 107 since Jan 2013
Thanks Given: 441
Thanks Received: 72


I have stick with some positions on ES:
07/17 sold ESV5 1860/1800 spread at 3$ (IM = 396$, delta =3.18)
07/17 sold ESV5 1880/1780 spread at 5$ (IM = 659$, delta=5.33)

33 days pass and I have not close my positions

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