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Selling Far OTM Options on Futures
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Created: by ron99 Attachments:4

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Selling Far OTM Options on Futures

  #41 (permalink)
Trading for Fun
Reno, USA
 
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Crude

Sold to open 25 January 105 Calls. Credit received 0.03 per contract. Delta 0.01 DTE=41

any thoughts appreciated

V

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  #42 (permalink)
Market Wizard
Cleveland, OH
 
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vmaiya73 View Post
Sold to open 25 January 105 Calls. Credit received 0.03 per contract. Delta 0.01 DTE=41

any thoughts appreciated

V

Probably be OK. They will probably settle at 0.04 but nobody was buying 0.04s today.

Be careful about selling low premium calls because one bad week could wipe out a couple of years profit doing them.

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  #43 (permalink)
Trading for Fun
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Ron,

Would what you have looked at ?

thanks

V

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  #44 (permalink)
Market Wizard
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vmaiya73 View Post
Ron,

Would what you have looked at ?

thanks

V

Feb 105s? Sell at 0.07 or 0.08 and buy back at 0.02.

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  #45 (permalink)
Trading for Fun
Reno, USA
 
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Appreciate it; thanks. ill take a look, maybe try and roll them out

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  #46 (permalink)
Elite Member
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If I sold at 3$ and today is expiration and the ask is 0.10, If I wait till the market gets to 0.00/expiration, do I still get the premium or do I have to close it now at 0.10 while there still is a market?

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  #47 (permalink)
Market Wizard
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pbylina View Post
If I sold at 3$ and today is expiration and the ask is 0.10, If I wait till the market gets to 0.00/expiration, do I still get the premium or do I have to close it now at 0.10 while there still is a market?

What commodity + contract?

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  #48 (permalink)
Trading Apprentice
Nashville TN/USA
 
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pbylina View Post
If I sold at 3$ and today is expiration and the ask is 0.10, If I wait till the market gets to 0.00/expiration, do I still get the premium or do I have to close it now at 0.10 while there still is a market?

What are you waiting for....you only have .03% left to make and it's pure gamma risk right now. And with a few hours left in the day you can take it off and re-establish the capital somewhere else to collect over the weekend. Surely you can find something that will yield more than .03% return for the next 3 days.

Unless it would cost you more to take it off than the .10 you get by letting it expire and you don't need the buying power I'm taking my profits and running like a thief in the night and moving on to something with more meat on the bone before the market closes.

For me I would have taken profits as soon as I could have bought it back for 1$ and taken a new position with more premium left and less gamma risk...but that's just they way I see capital use.

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  #49 (permalink)
Market Wizard
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ACstudio View Post
What are you waiting for....you only have .03% left to make and it's pure gamma risk right now. And with a few hours left in the day you can take it off and re-establish the capital somewhere else to collect over the weekend. Surely you can find something that will yield more than .03% return for the next 3 days.

Unless it would cost you more to take it off than the .10 you get by letting it expire and you don't need the buying power I'm taking my profits and running like a thief in the night and moving on to something with more meat on the bone before the market closes.

For me I would have taken profits as soon as I could have bought it back for 1$ and taken a new position with more premium left and less gamma risk...but that's just they way I see capital use.

Why take it off? It expires today. The margin goes off tonight. Just have both positions on today.

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  #50 (permalink)
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ron99 View Post
Why take it off? It expires today. The margin goes off tonight. Just have both positions on today.

Because unless it's cheaper to let them expire worthless then I look to put the buying power to use now rather than wait until Monday....but I would have done that some time ago if it was profitable and my Gamma risk was spiking.

.10 isn't worth me waiting for. Buying it back now frees up the capital so I can put something else on today before the market closes. Like I said .....unless buying power is not an issue.

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