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?

  #4841 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785


ron99 View Post
ES up 40 points in last hour. 11:30 to 12:30. Crazy.

And now a 40 point drop 1:15 to 2:15.

Started this thread Reply With Quote
Thanked by:

Can you help answer these questions
from other members on NexusFi?
Exit Strategy
NinjaTrader
NT7 Indicator Script Troubleshooting - Camarilla Pivots
NinjaTrader
My NT8 Volume Profile Split by Asian/Euro/Open
NinjaTrader
The space time continuum and the dynamics of a financial …
Emini and Emicro Index
Deepmoney LLM
Elite Quantitative GenAI/LLM
 
  #4842 (permalink)
CafeGrande
St Paul, MN, USA
 
Posts: 200 since Jan 2014
Thanks Given: 131
Thanks Received: 207

Note to self/all: Sometime in September, look up Performance History | LJM Partners to see how their moderately aggressive and aggressive strategies performed in August.

Reply With Quote
Thanked by:
  #4843 (permalink)
Hills
Barcelona
 
Posts: 14 since Mar 2015
Thanks Given: 7
Thanks Received: 7



PK 1 View Post
in the pre-market (at midnight GMT+1) and a few hours later it was possible (for me though IB) with incredible premiums far OTM even with expiry on the 31st of August worth it. But one has to be very careful (!) entering the market in such an environment. Even though this might be a huge dip in just a few days this isn't over yet and better prepare for a second big wave down the next weeks

I just wanted to trade that options today.
I closed all my positions last Friday morning so I have all my account in cash. I lost all the last 3 months gains. In my opinion it will take a long time for us to be able to use this strategy again in the future.

I follow in Twitter a guy from Venezuela called @acardenasfx that is an expert in Oil. In his opinion in a month or so the Oil will stop dropping to begin a new cycle. All of us could start thinking about a strategy with this asset

Reply With Quote
  #4844 (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


Hills View Post
I just wanted to trade that options today.
I closed all my positions last Friday morning so I have all my account in cash. I lost all the last 3 months gains. In my opinion it will take a long time for us to be able to use this strategy again in the future.

I follow in Twitter a guy from Venezuela called @acardenasfx that is an expert in Oil. In his opinion in a month or so the Oil will stop dropping to begin a new cycle. All of us could start thinking about a strategy with this asset

I understand this is a painful period and many will be reeling from the losses. This is a rare market event but essential why you are able to sell put options for decent premium in the first place. Once the dust is settled I think it is important to reflect and remember that options pricing is extremely efficient and if you use a strategy that has a 95% win rate, then you will eventually take 5 losses in 100 trades, and those 5 losses can erase the gains of the 95%. The skill is in still coming out ahead after taking those losses.

I know this might not be the most helpful post right now, but I don't think it is fair to say a strategy as good as this 'doesn't work' just because we have a large correction in the markets.

Visit my NexusFi Trade Journal Reply With Quote
  #4845 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785


CobblersAwls View Post
I understand this is a painful period and many will be reeling from the losses. This is a rare market event but essential why you are able to sell put options for decent premium in the first place. Once the dust is settled I think it is important to reflect and remember that options pricing is extremely efficient and if you use a strategy that has a 95% win rate, then you will eventually take 5 losses in 100 trades, and those 5 losses can erase the gains of the 95%. The skill is in still coming out ahead after taking those losses.

I know this might not be the most helpful post right now, but I don't think it is fair to say a strategy as good as this 'doesn't work' just because we have a large correction in the markets.

Excellent post.

With the "new" computer traded markets now we need to have much more tighter risk controls on positions. Bigger swings will become more normal than abnormal.

It has become more important to have good exit strategy than to pick what trades to put on.

I want to set a limit of X% draw down then exit but I don't know if that will work. I have seen many trades that hit those levels then rebound and the trade wasn't a loss. If you keep exiting at X% on trades that eventually aren't losers you will have a losing year. There is a fine line between exiting too much and not enough.

More research is needed.

Started this thread Reply With Quote
  #4846 (permalink)
 gfmatt 
Edmonton, Alberta
 
Experience: Advanced
Platform: IB
Trading: nq
Posts: 55 since Jan 2012
Thanks Given: 29
Thanks Received: 60


Hills View Post

I follow in Twitter a guy from Venezuela called @acardenasfx that is an expert in Oil. In his opinion in a month or so the Oil will stop dropping to begin a new cycle. All of us could start thinking about a strategy with this asset

Argumentum ad verecundiam. There is no such thing as an 'expert' in oil, or any other financial market. Want a prediction, look at an option chain, all the probabilities are there.

Reply With Quote
Thanked by:
  #4847 (permalink)
cnncurt
Phoenix, AZ/USA
 
Posts: 8 since Oct 2013
Thanks Given: 2
Thanks Received: 10


gfmatt View Post
Argumentum ad verecundiam. There is no such thing as an 'expert' in oil, or any other financial market. Want a prediction, look at an option chain, all the probabilities are there.

Amen. Biggest trader mistakes are believing anyone can predict the future and trusting the advice of "experts". A true "expert" would make infinitely more money actually trading the market than selling his opinion on it.

Reply With Quote
  #4848 (permalink)
Chubbly
Ottawa
 
Posts: 87 since May 2015
Thanks Given: 67
Thanks Received: 88


gfmatt View Post
Argumentum ad verecundiam. There is no such thing as an 'expert' in oil, or any other financial market. Want a prediction, look at an option chain, all the probabilities are there.


Yep, I agree with you. The only edge you have is the option chain for predicting the probabilities. I am assuming that expert in oil was wasn't calling for $30 oil just six weeks ago when it was in the $60 area.

The drop in oil isn't because a drop in demand, it is an over supply issue while the Saudi want "market share"

Reply With Quote
  #4849 (permalink)
 PeakGrowth 
Sydney, Australia
 
Experience: Intermediate
Platform: Sierra Chart, IRESS
Broker: IB, IQFeed
Trading: ES, SPI, ASX stocks, options
Posts: 399 since Jun 2015
Thanks Given: 169
Thanks Received: 465

This strategy is more tradeable than ever, high vol is great for this, just hedge. Diagonal bull puts would have a good payoff

Sent from my SM-N9005 using Tapatalk

Visit my NexusFi Trade Journal Reply With Quote
Thanked by:
  #4850 (permalink)
 
rmejia's Avatar
 rmejia 
Puerto Rico
 
Experience: Intermediate
Platform: thinkorswim
Broker: TD Ameritrade
Trading: Options
Posts: 379 since Oct 2010
Thanks Given: 3,614
Thanks Received: 441



ron99 View Post
It has become more important to have good exit strategy than to pick what trades to put on.

I want to set a limit of X% draw down then exit but I don't know if that will work. I have seen many trades that hit those levels then rebound and the trade wasn't a loss. If you keep exiting at X% on trades that eventually aren't losers you will have a losing year. There is a fine line between exiting too much and not enough.

More research is needed.

I've been wondering about the same again after this event. I wish I had the data to test different exit percentages. I remember seeing some tastytrade market measures talk about mechanical exits. I don't know where tastytrade gets their data from; Sosnoff has mentioned releasing it for free to everyone in the future to crowd test strategies. Found this market measure on "Exiting Losing Trades" which is for a 1SD daily strangle on the SPY from 2009-2014 which might produce similar results, but no way of knowing without testing the different parameters. The results from this study showed a 2x loss from the credit received as the optimal exit point.

https://tastytrade.com/tt/shows/market-measures/episodes/exiting-losing-trades-12-16-2014

Attached Thumbnails
Selling Options on Futures?-mm121614undefined_exit_mstr_rev070815.pdf  
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