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Selling Options on Futures?


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Selling Options on Futures?

  #5901 (permalink)
 myrrdin 
Linz Austria
 
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ron99 View Post
I exited this trade at 1.10 today. MROI is 3.9%. 14 days held.

I exited this trade at 1.10 today. MROI is 1.7% 35 days held.

I am thinking about waiting until reentering. I don't like possible government shutdown this week. Or I may reenter just some positions tomorrow. Not my full amount.

ron99: How large do you think will be a move downwards of the S&P in case of a government shutdown this week ?

Best regards, Myrrdin

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  #5902 (permalink)
 ron99 
Cleveland, OH
 
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myrrdin View Post
ron99: How large do you think will be a move downwards of the S&P in case of a government shutdown this week ?

Best regards, Myrrdin

Last gov shutdown was Oct 1 to Oct 16, 2013.

On 9/19/2013 ESz was 1718. On 10/9/13 it was 1649. So not large but 69 points. By end of Oct it was 1768. End of year it was 1813.

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  #5903 (permalink)
 myrrdin 
Linz Austria
 
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ron99 View Post
Last gov shutdown was Oct 1 to Oct 16, 2013.

On 9/19/2013 ESz was 1718. On 10/9/13 it was 1649. So not large but 69 points. By end of Oct it was 1768. End of year it was 1813.

I took profit on several ES put positions yesterday and today at 50 %, and replaced them.

Ron99's information that the size of the downwards move after the most recent government shutdown in 2013 was limited, and my optimism regarding the second part of the French election were the basis of this decision.

Best regards, Myrrdin

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  #5904 (permalink)
 ron99 
Cleveland, OH
 
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ron99 View Post
I exited this trade at 1.10 today. MROI is 3.9%. 14 days held.

I exited this trade at 1.10 today. MROI is 1.7% 35 days held.

I am thinking about waiting until reentering. I don't like possible government shutdown this week. Or I may reenter just some positions tomorrow. Not my full amount.

ES is up 13.00 right now today. This is why I say I should just enter the new positions without trying to time entry. I should listen to myself.

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  #5905 (permalink)
 myrrdin 
Linz Austria
 
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ron99 View Post
ES is up 13.00 right now today. This is why I say I should just enter the new positions without trying to time entry. I should listen to myself.

I fully agree. I am not good in timing entry and exit of a trade, and that is why I sell options. Whenever I tried to find a good timing for an entry I failed in more than 50 %, and, thus, lost money. The only time when I reduce positions is when there is a danger of a severe (!) move downwards. (If I stick to my rules ...)

Best regards, Myrrdin

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  #5906 (permalink)
 manuel999 
Germany
 
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ron99 View Post
ES is up 13.00 right now today. This is why I say I should just enter the new positions without trying to time entry. I should listen to myself.

On the other hand, volatility is so low that it is hard to see that it will not rise again a bit in the next days.
At least next week, when there may be some worries again about the French election.

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  #5907 (permalink)
 myrrdin 
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manuel999 View Post
On the other hand, volatility is so low that it is hard to see that it will not rise again a bit in the next days.
At least next week, when there may be some worries again about the French election.

Volatility has demonstrated in recent years that it can be low for weeks and months. Yes, it will rise again some day. But during the phase of low volatility you can make enough money to compensate for a losing trade due to rising volatility.

Best regards, Myrrdin

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  #5908 (permalink)
 ron99 
Cleveland, OH
 
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manuel999 View Post
On the other hand, volatility is so low that it is hard to see that it will not rise again a bit in the next days.
At least next week, when there may be some worries again about the French election.

Next week I'll post what I would have done on Monday April 24th and what those same contracts are on May 1st to see the difference.

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  #5909 (permalink)
rajab
westhills california US
 
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ron99 View Post
ES is up 13.00 right now today. This is why I say I should just enter the new positions without trying to time entry. I should listen to myself.

Indeed Idon't either.

Well I did open a small position on friday(7/21/2017) Sold Ew3n17p1990p1590(2) price 3.1. Exited at 2.15 today (4/24/2017). Broke the 50% sell rule but I think we are at the top of the range.

Babak

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  #5910 (permalink)
 myrrdin 
Linz Austria
 
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When talking about the low volatility of the ES we should be aware of the fact that the actual volatility indeed is very low. The VIX closed at 10.76 yesterday. But the volatility for the July or August options is significantly higher - July closed at 14.00 yesterday.

It is also interesting that during the uncertainties around the French elections the VIX moved up from 10.90 to 16.28 (lowest to highest value in early April), and the July future only from 14.65 to 15.90 .

In my opinion these are key reasons why Ron's concept of selling 100 DTE and buying back at 50 % works so well. Volatility of the options Ron suggests to sell is significantly higher than short-term volatility, and it rises less in case of a problem.

Best regards, Myrrdin

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Last Updated on July 28, 2023


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