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Let us trade options on futures
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Let us trade options on futures

  #11 (permalink)
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Delta_Panther View Post
Hi Jonc

Yes, I do trade options. Used to do it in earlier years on stocks and then changed to options on futures.

Commissions depend on your broker. If you are new to options on futures, I recommend a broker which is able to answer questions from your side. Such broker will charge higher round turn commissions compare to brokers which just offer little service and where the stuff is not educated in option strategies.

Who earns from the spread? ( I guess you mean the bid ask spread )

The one which is between the buyer and the seller is the one which earns from this spread. In pit traded markets it is the guy which works on the trading floor at the exchange and in electronically markets it is the company which offers this service.

By the way: The spreads I mean are called: Credit Spreads.

There are many more like Debit Spreads, Back Spreads, Ratio Spreads, Diagonal Spreads, Calendar Spreads. Each one of this strategy has its use under certain market conditions.

Do you trade some times credit spreads?

Delta_Panther

DP, thanks for your reply. I'm pretty new to options and learning more about them. There don't seems to be much discussion about options trading on the web or I have not found the right place yet.

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  #12 (permalink)
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jonc View Post
DP, thanks for your reply. I'm pretty new to options and learning more about them. There don't seems to be much discussion about options trading on the web or I have not found the right place yet.

Hi Jonc

If you have questions, just ask. Some times I have time to post. Here a very informative link you may are interested in: Options Trading Forums

Delta_Panther

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  #13 (permalink)
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There are some pretty good resources here: Options Education | Strategy Papers & Trading Tools - CME Group

Depending on who you clear with, you might be able to get access to EOS: CME EOS Trader

There are also a bunch of ISV demos that can highlight what you need to look for (or what you are missing):
Choosing a Trading Application

Happy reading!

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  #14 (permalink)
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Hi

Here an off topic, as markets are not active and we have time to open our eyes an mind to other things:

https://rapidshare.com/#!download|560dt|1839825163|OdetoNat.pps|6627|R~9B0C57D76A26AEC10C0FF534041CDAE0|0|0

Just press the green download button. If the slide show not works on your computer, just press the left of your mouse to see the next picture and to read the text.

Delta_Panther

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  #15 (permalink)
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Delta_Panther View Post
Hi

Any body which is interested in that subject and trading is welcome to join this thread.

Most simple strategy: Spreads.

Did you hear the laugh in the background from the pros witch sell this information?

Any comments on Credit Spreads?

We all know, that any information we will get on option trading are very well protected and only available when we pay huge money for little what we get.

Is any body out there, which likes to share information in an open forum about option trading on futures in the USA?

Delta_Panther


@Delta_Panther

What is the benefit of using Futures options over other options products, in your opinion? I am interested in this subject as a longer term swing play using a Pension account with Interactive Brokers.

Brit

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  #16 (permalink)
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britkid99 View Post
@Delta_Panther

What is the benefit of using Futures options over other options products, in your opinion? I am interested in this subject as a longer term swing play using a Pension account with Interactive Brokers.

Brit

Hi Brit

If you ask me like that I truly have to say: I never really thought about it. I am just used to O on F and that;s it.

Depending on the strategies, you can use option only as a hedge against the future. But the same you can do against shares or ETF's.

If you do pure option strategies which not include other derivatives, you can do that with O on F and O on Shares.

Let me start here: At the moment you start to feel save when people start to talk about theta, gamma, vega, rho, time decay, implied volatility, open interest and so on, you did the first step.

Next step is to understand a few option strategies. Make it simple at the begin and go for a credit spreads, a synthetic put and a synthetic call. If you have a share portfolio, go for covered calls and puts. That is more than enough for the begin.

Next step you then can do is really to specialize your self on the conditions and rules you have to consider and to understand from the underlying you will use. If your choice then is the futures, so it will be. In my opinion, there is no better or worst. Just personal interest.

Choosing the future as the underlying, you then have to understand the different expiry months, different kind of strike levels for options, different models of future pricing and so on.

Delta_Panther

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  #17 (permalink)
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Hey guys

I don't know if this question is stupid or obvious, but the following question appeared to me:

1.) Selling covered options for Acme Corp trough Broker X
2.) Having stocks from Acme Corp in my personal portfolio at Broker Z

Now my trade goes "wrong" and the counter party uses the option for the stocks. What is the usual way to fulfill this trade? Delivery of the stocks (transferring the stocks to the new owner, which would result in further transaction costs?) or a cash settlement (paying the agreed price for the stocks respectively the difference)? For futures options it seems clear that there is only a cash settlement, but how is it for stocks on covered options...

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  #18 (permalink)
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options


init77 View Post
For futures options it seems clear that there is only a cash settlement, but how is it for stocks on covered options...

For index options like RUT, SPX (European Style) = cash settlement on Friday's open price

stocks (American style) = stock settlement on Friday's closing price but you have to exercise, ITM exercised automatically

looking forward to more comments and examples on futures options and strategies by Delta_Panther. Guess they don't call him Delta for nothing........................

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  #19 (permalink)
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Can you guys advise if different option brokers can offer different premiums on the same underlying instrument with the same strike price and expiry?

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  #20 (permalink)
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jonc View Post
Can you guys advise if different option brokers can offer different premiums on the same underlying instrument with the same strike price and expiry?

Hi jonc

In my opinion : That is not the point in option trading and it never was the point in option trading.

Are you able or do you understand how to calculate any options or credit spreads fair value prices?

What ever broker you use, this is the first thing you do before you implement any option trade in the market.

After you have your price calculated you check the price in your platform. If you do not agree, you can place a limit order or you call the desk to give you the actual bid ask price for the option or spread you want to trade.

Some spreads for example are not even shown on your brokers platform.

Option trading is not future trading. and I am not clear if you are clear about that?

Delta_Panther

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