Diversified Option Selling Portfolio - Options on Futures | futures io social day trading
futures io futures trading


Diversified Option Selling Portfolio
Updated: Views / Replies:59,352 / 1,162
Created: by myrrdin Attachments:77

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 77  
 
Thread Tools Search this Thread
 

Diversified Option Selling Portfolio

  #1111 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,078 since Nov 2014
Thanks: 1,431 given, 1,273 received
Forum Reputation: Legendary


Calamari88 View Post
I'm probably going to strangle June Gold. Which month are you looking at?

I am looking at the April contracts. I would prefer February, but premium is too low.

Best regards, Myrrdin

Reply With Quote
The following user says Thank You to myrrdin for this post:
 
  #1112 (permalink)
Trading Apprentice
Cologne + NRW/Germany
 
Futures Experience: Master
Platform: TWS, ATAS, NT7
Favorite Futures: Commodities, ES
 
Posts: 6 since Sep 2017
Thanks: 6 given, 7 received


myrrdin View Post
I assume you are customer of IAB, as you use TWS as your platform. Here it is almost mandatory to limit risk, as margin for naked options is huge. I would expect that also ratio spreads (1 long option and several further out of the money short options) use a lot of margin.

Best regards, Myrrdin

Yes, it uses quite the same amount auf Margin as a naked position with the same value, the difference is not that big. But thats not the reason why i am doing it. I like the additional Protection, specially on Markets like Gold and Crude Oil with huge upside Risk. Volatility is hitting not that hard in coparison to a naked Position. Additionaly, i like the big staying power of a Ratio Spread.

In my opinion, probably everything what i can earn with naked position, i can do it with ratio spreads, just better. I love it.

Reply With Quote
 
  #1113 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,078 since Nov 2014
Thanks: 1,431 given, 1,273 received
Forum Reputation: Legendary



VolumeRider View Post
Yes, it uses quite the same amount auf Margin as a naked position with the same value, the difference is not that big. But thats not the reason why i am doing it. I like the additional Protection, specially on Markets like Gold and Crude Oil with huge upside Risk. Volatility is hitting not that hard in coparison to a naked Position. Additionaly, i like the big staying power of a Ratio Spread.

In my opinion, probably everything what i can earn with naked position, i can do it with ratio spreads, just better. I love it.

As far as I understand ratio spreads, they also include naked positions. An example:

Your CL trade: 60 Long, 3x63 Short and 1x65 Short

You have one long position, 1 covered short position and 3 naked short positions.

IAB takes a lot of margin for these naked positions, much more than other brokers. Thus, when trading my IAB account, I traded the following spread:

Short CLH C61, Long CLH C71. No naked Option, thus, acceptable margin at IAB.

Best regards, Myrrdin

Reply With Quote
The following user says Thank You to myrrdin for this post:
 
  #1114 (permalink)
Trading Apprentice
Cologne + NRW/Germany
 
Futures Experience: Master
Platform: TWS, ATAS, NT7
Favorite Futures: Commodities, ES
 
Posts: 6 since Sep 2017
Thanks: 6 given, 7 received


myrrdin View Post
As far as I understand ratio spreads, they also include naked positions. An example:

Your CL trade: 60 Long, 3x63 Short and 1x65 Short

You have one long position, 1 covered short position and 3 naked short positions.

IAB takes a lot of margin for these naked positions, much more than other brokers. Thus, when trading my IAB account, I traded the following spread:

Short CLH C61, Long CLH C71. No naked Option, thus, acceptable margin at IAB.

Best regards, Myrrdin

Yes, Ratio Spread include naked positions. Ratio Spread is not for Margin reduction particulary but for additional protection and Stayingpower. First, staying power: you have quite doble staying power in the first weeks, later even more. Second, Deep OTM Options: With properly seted Ratio you can reach deeper Strikes for Selling. So in my opinion, you have no downside, besides not liquid Markets, but these type of Markets are quite tricky for Naked Selling to.

Reply With Quote
 
  #1115 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,078 since Nov 2014
Thanks: 1,431 given, 1,273 received
Forum Reputation: Legendary


VolumeRider View Post
Yes, Ratio Spread include naked positions. Ratio Spread is not for Margin reduction particulary but for additional protection and Stayingpower. First, staying power: you have quite doble staying power in the first weeks, later even more. Second, Deep OTM Options: With properly seted Ratio you can reach deeper Strikes for Selling. So in my opinion, you have no downside, besides not liquid Markets, but these type of Markets are quite tricky for Naked Selling to.

To be understood correctly: I think ratio spreads are an interesting concept. But IAB calculates margin in a way that it is preferable to avoid naked options.

Best regards, Myrrdin

Reply With Quote
 
  #1116 (permalink)
Trading Apprentice
Cologne + NRW/Germany
 
Futures Experience: Master
Platform: TWS, ATAS, NT7
Favorite Futures: Commodities, ES
 
Posts: 6 since Sep 2017
Thanks: 6 given, 7 received


myrrdin View Post
To be understood correctly: I think ratio spreads are an interesting concept. But IAB calculates margin in a way that it is preferable to avoid naked options.

Best regards, Myrrdin

Yes, IB has quite high Margin for selling naked. You have a bit higher Margin for Ratio as for ONE Short Option with the same Value. Currently looking at Gold 1600 April.18 about 300 Dollar with 2,7k Initial-Margin and Ratio Spread with April.18( GC 1xLong 1600 and GC 3xShort 1660) for abut 300 Dollar and 3,3k Initial-Margin. As you see, Short Strike is deeper OTM, Margin is a bit higher but not dramaticaly.

I wanted to post some pictures, but apperently i need at least 5 Posts for that, i have only three. So, i going to mail it to you, you can post it here if you want.

br
A.M.

Reply With Quote
The following user says Thank You to VolumeRider for this post:
 
  #1117 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,078 since Nov 2014
Thanks: 1,431 given, 1,273 received
Forum Reputation: Legendary


VolumeRider View Post
Yes, IB has quite high Margin for selling naked. You have a bit higher Margin for Ratio as for ONE Short Option with the same Value. Currently looking at Gold 1600 April.18 about 300 Dollar with 2,7k Initial-Margin and Ratio Spread with April.18( GC 1xLong 1600 and GC 3xShort 1660) for abut 300 Dollar and 3,3k Initial-Margin. As you see, Short Strike is deeper OTM, Margin is a bit higher but not dramaticaly.

I wanted to post some pictures, but apperently i need at least 5 Posts for that, i have only three. So, i going to mail it to you, you can post it here if you want.

br
A.M.

Short GCJ C1575 Long GCJ C1775 is premium of $310 and initial margin of $1905.

At IAB margin per premium is significantly less, if you avoid naked options.

Best regards, Myrrdin

Reply With Quote
 
  #1118 (permalink)
Elite Member
Germany
 
Futures Experience: Intermediate
Platform: TWS
Favorite Futures: Options on futures
 
Posts: 123 since Jul 2014
Thanks: 239 given, 117 received


myrrdin View Post
Both of these options are short. I will try to explain the concept of this trade:

In the meat markets, the indvidual futures for different months trade more or less independently from each other. In comparison, futures for different months in the metal markets trade more or less synchronized. The reason is that it is more difficult to store meat than to store metals.

It takes some months from the start of "production" of hogs until they can be sold. This period of time is fixed, as the meat cannot be stored in large volumes.

In Q4 there will be too much meat, cash price moves downwards since middle of July, price for delivery in December more or less follows cash price. This is a normal seasonal behaviour, which is intensified this year, as two new plants that started this fall will still not be up to capacity. In Q1/2018 there will be less meat available, thus, price for the February contract should move upwards. I expect the December contract to expire somewhere below $55, and the February contract somewhere above $65.

As cash price affects all contracts to a certain degree such spreads help to use one option as a hedge for the other.

Best regards, Myrrdin

Is it the same behaviour for Cattle?

Thanks.

Reply With Quote
 
  #1119 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,078 since Nov 2014
Thanks: 1,431 given, 1,273 received
Forum Reputation: Legendary


manuel999 View Post
Is it the same behaviour for Cattle?

Thanks.

No, I currently do not see this.

Best regards, Myrrdin

Reply With Quote
The following 2 users say Thank You to myrrdin for this post:
 
  #1120 (permalink)
Elite Member
Germany
 
Futures Experience: Intermediate
Platform: TWS
Favorite Futures: Options on futures
 
Posts: 123 since Jul 2014
Thanks: 239 given, 117 received


In the next days I am planning to sell ZSH8 (March '18) P860.
According to the longterm seasonals we should have the low beginning of the October.
Also the CoT data indicates that commercials tend to expect higher prices.
The chinese market is closed this week, so I would expect demand picking up again next week.
The chart is not giving a clear trend to me, though the price is historically quite low.
So I will only start with a small position, possibly increasing it in the forthcoming days.
Bid is currently
at 2 5/8
Cordier&Grossman expect a rangebound market to the end of the year and will do strangles.
Thus, I am willing to sell calls on spikes as well if there is enough DTE.

Reply With Quote
The following 3 users say Thank You to manuel999 for this post:

Reply



futures io > > > > Diversified Option Selling Portfolio

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)
 

RandBots: AutoTrading Bots to diversify your trading

Oct 24
 

TopstepTrader: Profiting Without Risking Your Own Money

Oct 26

Building Open Source Indicators for NT8 w/Fat Tails @ Lizard Indicators

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Webinar: Option Selling with and without insurance w/Carley Garner Big Mike Options on Futures 50 March 24th, 2015 05:52 PM
Portfolio Trader no erocla MultiCharts 1 November 27th, 2014 10:56 AM
"DTS" Diversified Trading System - Anybody out there!? ShaunG Trading Reviews and Vendors 2 July 30th, 2014 05:54 AM
Diversified Trading Systems soch Trading Reviews and Vendors 3 February 18th, 2013 09:12 PM
Portfolio Construction dgresens Psychology and Money Management 3 October 25th, 2012 03:33 AM


All times are GMT -4. The time now is 05:43 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
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.
no new posts
Page generated 2017-10-24 in 0.08 seconds with 19 queries on phoenix via your IP 54.162.152.232