Broker/Data: Cannon Trading Company / Ninja Trader/Rithmic, E-Futures trading platform
Favorite Futures: Gold and Crude Oil
Posts: 46 since Dec 2013
Thanks: 17 given,
Trading futures options
I have a broker at Cannon Trading who suggests this. Though I'm not too knowledgeable about trading options on futures, I would visit Cannon Trading's website and see how they can help you from there. A knowledgeable broker who is willing to share what he knows and his experience is a pretty good resource.
Unfortunately , Sheridan's educational webcasts did not work out for me. I tried sim trading the suggestions and the results were far short for the effort and time used; this was a year or two before I discovered futures.io (formerly BMT). Back then Sheridan had a mentorship training program which cost >$4k. But I never tried it out. Instead I went for sjoptions where the founder/trainer had been a Sheridan student. Turned out that was a bust too and fortunately I just did sim , but I'm down the tuition cost. I had also heard a few others had lost big with the crazy spreads done there in the tune of tens of thousands or > 100k. (it was also obvious after some time to me that all their "trading accounts" in their videos whether the 400k or 3 mil accounts were >all< sim. I got fooled into believing their 3 mil account was real by sales. That says enough about the confidence in their own methods.
Imho, the best way to trade delta-neutral spreads is learn and experience enough regular directional trading to gauge when a stock is likely to consolidate, or anticipate it's movement then "cast out" a wide but profitable enough "net" kind of like a net-throwing fisherman.
More advanced ideas are on Ron99's thread and webinar "Selling options on futures". Lot of good discussion there even about options in general. Carly Garner has also done a few nice futures.io (formerly BMT) intro webinars on options.
In any case, there are many pitfalls such of lack of option bid/ask volume or bad fills from market making and high commissions.
So yes, simpler options and spreads are the best way to go imo for option retail trading, whether to replace stock trading directional trades or simple two leg option spreads. But avoid the John Carter affiliate central. A good place for free education is tastytrade.com -> The Liz and Jenny show where they go over how to set up precise credit and debit spreads.
In the end, imho, directional trading experience and skill is still a must.
Last edited by Cloudy; December 20th, 2013 at 04:27 PM.
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I personally know some relatively small traders using Sheridan methods, particularly with short-term calendars and butterflies, that generate 3% to 10% per month. It's not rocket science, if you aren't greedy and control your risk.
Tastytrade is also great. Lots of great info in their Market Measures segments, plus Tom and Tony are hilarious. Their recent use of what they call Big Dawg butterflies is basically one of the strategies that Sheridan has been suggesting for years. But I can't stand listening to Liz, she's so annoying, even though their show is pretty good for complete beginners.
Last edited by gfmatt; December 20th, 2013 at 04:46 PM.
Ive been watching Sheridan's videos a few others and still have not got a firm grasp on how to use the greeks other than a .15 delta means a 85% probability.
Andrew Crowder also has a series of utubes on simple vertical spreads. He just uses RSI to determine OB/OS of an etf and uses that directional bias to structure his spreads to generate a 10-17% return on 20-50 day timeframe options.
I will check out tastytrade.
Im using IB for stocks and options and I just hate that trader workstation. I wish there was another option platform that plugged into IB