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Diversified Option Selling Portfolio
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Diversified Option Selling Portfolio

  #1411 (permalink)
Legendary Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
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I started again selling of strangles in Natural Gas this year. ( I generally do not sell strangles in F, G, H.)

Sold the NGK C3.25/P2.4 at $660 each, and intend to buy them back at and roll at 50 %.

Best regards, Myrrdin

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  #1412 (permalink)
Legendary Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,497 since Nov 2014
Thanks: 1,850 given, 1,934 received

Today I bought (!) cheap options for the first time in a while - two positions of cheap lottery tickets.

SN P8, which should make money in case the US and China do not get together in the near future.

ESH C2800, which should make money in case the US and China get together within the next two months.

I will sell half of each position, when its value has doubled. In this case, the other half will be a free trade.

Best regards, Myrrdin

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  #1413 (permalink)
Legendary Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,497 since Nov 2014
Thanks: 1,850 given, 1,934 received


I currently hold the following short options positions:

CN P3.90
I had taken profit on the CH P3.80. High supply and high demand. I assume that soon the market will concentrate more on demand, and that the huge supply is more or less priced. Seasonally the price in March should be higher than the price in September. I intend to take profit at 25 %.

LCM C120
I am bearish LC for the next couple of months. The futures are overpriced. Additionally, due to the cold temperatures recently, some consumption was lost, and will not be replaced.

LHJ P56/C72
I had sold the C72 some time ago, and added the P56 recently. The spread should expire worhless. I intend to buy it back at 25 %.

KCK P1, KCN P1
Smaller crop 2019/2020 in Brazil, smaller than expected crop in Vietnam, and problems at some minor producers should limit downside. COT data - when published again - should be bullish. I intend to take profit at 25 %.

At my "targets" I usually place intraday limit orders. In case of changing fundamentals or unexpected price behaviour I might exit earlier.

Currently the majority of my positions is futures or future spreads.

Best regards, Myrrdin

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  #1414 (permalink)
Hannover Germany
 
Trading Experience: Intermediate
Platform: TWS
Broker/Data: IB only
Favorite Futures: FOPs
 
Posts: 10 since Aug 2018
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myrrdin View Post
I currently hold the following short options positions:

CN P3.90
I had taken profit on the CH P3.80. High supply and high demand. I assume that soon the market will concentrate more on demand, and that the huge supply is more or less priced. Seasonally the price in March should be higher than the price in September. I intend to take profit at 25 %.

LCM C120
I am bearish LC for the next couple of months. The futures are overpriced. Additionally, due to the cold temperatures recently, some consumption was lost, and will not be replaced.

LHJ P56/C72
I had sold the C72 some time ago, and added the P56 recently. The spread should expire worhless. I intend to buy it back at 25 %.

KCK P1, KCN P1
Smaller crop 2019/2020 in Brazil, smaller than expected crop in Vietnam, and problems at some minor producers should limit downside. COT data - when published again - should be bullish. I intend to take profit at 25 %.

At my "targets" I usually place intraday limit orders. In case of changing fundamentals or unexpected price behaviour I might exit earlier.

Currently the majority of my positions is futures or future spreads.

Best regards, Myrrdin

Myrrdin,

thx again for granting insight into your portfolio. In Coffee I did the same, further down and only the one closer in time (KCK P0,95 and 0,975).

TP at 25% you mean to gain 75%, right?

Thx.

M.

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The following user says Thank You to MGGer for this post:
 
  #1415 (permalink)
Legendary Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
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Thanks: 1,850 given, 1,934 received


MGGer View Post
Myrrdin,

thx again for granting insight into your portfolio. In Coffee I did the same, further down and only the one closer in time (KCK P0,95 and 0,975).

TP at 25% you mean to gain 75%, right?

Thx.

M.

Correct. I will take 75 % of the potential profit, and then probably sell further KCN puts.

I do not like holding short options close to expiry becaues of the Gamma risk.

Best regards, Myrrdin

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  #1416 (permalink)
Legendary Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
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Favorite Futures: Commodities
 
Posts: 1,497 since Nov 2014
Thanks: 1,850 given, 1,934 received

I currently hold the following short options positions:

(LCM C120), LCJ C129
Was stopped out of the LCM C120 with a minor loss. Sold the LCJ C129.
I am bearish LC for the next couple of months. The futures are overpriced.
I consider the Cattle on feed report from last Friday as moderately bullish.

(LHJ P56/C72)
Was stopped out of this trade on the strong move down last week with a loss of approx 100 %.

LHJ P50, LHM P66
Sold these puts after being stopped out of the LHJ P56/C72 spread. Both strikes should hold even if there is no additional buying from China.

(KCK P1), KCN P1
Bought back the May puts with a small loss, and "rolled" them to the July contract.
Smaller crop 2019/2020 in Brazil, smaller than expected crop in Vietnam, and problems at some minor producers should limit downside. COT data - when published again - should be bullish. I intend to take profit at 25 %.

NGM +P2.1/-P2.4/-C3.2/+C3.7
After buying back the NGK options at 50 %, I sold NGM.
In future I will sell NG options (Iron Condors) every week, 1/4 of a full position. Beginning at 120 DTE, and ending when the next contract reaches 120 DTE. Buy back at 50 %.

At my "targets" I usually place intraday limit orders. In case of changing fundamentals or unexpected price behaviour I might exit earlier.

Currently the majority of my positions is futures or future spreads.

Best regards, Myrrdin

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  #1417 (permalink)
Hannover Germany
 
Trading Experience: Intermediate
Platform: TWS
Broker/Data: IB only
Favorite Futures: FOPs
 
Posts: 10 since Aug 2018
Thanks: 14 given, 6 received


myrrdin View Post
Correct. I will take 75 % of the potential profit, and then probably sell further KCN puts.

I do not like holding short options close to expiry becaues of the Gamma risk.

Best regards, Myrrdin

this time acting with shorter DTE worked fine for me: closed 0.95 KCK Puts@profit target, still hold the 0.975 KCK Puts. I would buy the futures and roll them over until the price is back above 1.00 or plus 0.025 in the futures rolled over.

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The following 2 users say Thank You to MGGer for this post:
 
  #1418 (permalink)
Hannover Germany
 
Trading Experience: Intermediate
Platform: TWS
Broker/Data: IB only
Favorite Futures: FOPs
 
Posts: 10 since Aug 2018
Thanks: 14 given, 6 received


myrrdin View Post
I currently hold the following short options positions:

(LCM C120), LCJ C129
Was stopped out of the LCM C120 with a minor loss. Sold the LCJ C129.
I am bearish LC for the next couple of months. The futures are overpriced.
I consider the Cattle on feed report from last Friday as moderately bullish.

(LHJ P56/C72)
Was stopped out of this trade on the strong move down last week with a loss of approx 100 %.

LHJ P50, LHM P66
Sold these puts after being stopped out of the LHJ P56/C72 spread. Both strikes should hold even if there is no additional buying from China.

(KCK P1), KCN P1
Bought back the May puts with a small loss, and "rolled" them to the July contract.
Smaller crop 2019/2020 in Brazil, smaller than expected crop in Vietnam, and problems at some minor producers should limit downside. COT data - when published again - should be bullish. I intend to take profit at 25 %.

NGM +P2.1/-P2.4/-C3.2/+C3.7
After buying back the NGK options at 50 %, I sold NGM.
In future I will sell NG options (Iron Condors) every week, 1/4 of a full position. Beginning at 120 DTE, and ending when the next contract reaches 120 DTE. Buy back at 50 %.

At my "targets" I usually place intraday limit orders. In case of changing fundamentals or unexpected price behaviour I might exit earlier.

Currently the majority of my positions is futures or future spreads.

Best regards, Myrrdin

selling NG options seams to me kind of low paid risk due to actual low volatility. Or do you regard vol in NG as high enough and/or is there generally no tendency to rising vol in spring and summer?

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  #1419 (permalink)
Legendary Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,497 since Nov 2014
Thanks: 1,850 given, 1,934 received


MGGer View Post
selling NG options seams to me kind of low paid risk due to actual low volatility. Or do you regard vol in NG as high enough and/or is there generally no tendency to rising vol in spring and summer?

Volatility of Natural Gas is low. But I do not mind, as I consider the probability of an upruptly rising volatility at this time of the year to be low. But of course you have to be careful, and exit the positions, when you have to exit them.

In December volativity usually is much higher, but I would not recommend to sell Natural Gas Options at this time of the year. In general, I avoid selling options for the Z, F, G, and H contracts. In spite of the high volatility in winter.

My trading of Natural Gas has changed significantly in recent years. The large production of Natural Gas in the US makes prices in spring, summer, and fall much more predictable. The percentage of Natural Gas production near the Southern coast where (unpredictable) hurricanes pose a danger, is now not as significant as some years ago.

Best regards, Myrrdin

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  #1420 (permalink)
westhills california US
 
Trading Experience: Beginner
Platform: TOS
Favorite Futures: FOREX,STOCKS,FUTURES
 
Posts: 88 since May 2015
Thanks: 122 given, 19 received


Hey Myrrdin
What would you say the advantages and disadvantages of selling an ATM credit put spread with a DTE of 360days? I have been selling GC credit put spreads and up to couple of weeks a go doing good. But gold dropped for what ever reason and now I am ITM. It moved fast on me. My margin is still about 20% of my account. I am thinking of keeping my position and adding a long dated credit put spread to what I already have.
Thoughts please?

Babak

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