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Diversified Option Selling Portfolio
Started:September 6th, 2015 (11:22 AM) by myrrdin Views / Replies:26,143 / 581
Last Reply:22 Hours Ago (01:20 PM) Attachments:38

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Diversified Option Selling Portfolio

Old June 2nd, 2016, 11:28 AM   #231 (permalink)
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myrrdin View Post
With a big supply to absorb later this year, December hog prices should not move much higher.

Sold the LHZ C68 for 2.00.

Best regards, Myrrdin

I have short straddle on HE Q6 80 (com premium = 5.65) from 05/30.

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Old June 2nd, 2016, 11:49 AM   #232 (permalink)
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uuu1965 View Post
I have short straddle on HE Q6 80 (com premium = 5.65) from 05/30.

My current forecast for the LHQ price at expiry is 77.50. In this case, your straddle would clearly be profitable.

Meat options have a strong tendency to end at a price level where most options expire worthless. From this point of view, the LHQ should be between 78 and 82 at the time of expiry of LHQ options. But of course open interest for the different strike prices can change until the expiry date.

Good luck !

Best regards, Myrrdin

PS: The HE futures are the same than the LH futures. LH is used in the pit, HE in the electronic market.

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Old June 3rd, 2016, 09:47 AM   #233 (permalink)
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Sold again coffee calls, this time the KCU C155.

The Job Report was very weak, and a weak economy means that not so much coffee is bought. The contract is for Arabica coffee, which is the more expensive one compared to Robusta.

Best regards, Myrrdin

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Old June 3rd, 2016, 04:16 PM   #234 (permalink)
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myrrdin, you look to be doing well this year. Can I ask your ROI for this year?

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Old June 4th, 2016, 08:53 AM   #235 (permalink)
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ron99 View Post
myrrdin, you look to be doing well this year. Can I ask your ROI for this year?

Definitely 2016 is a good year for my option selling portfolio.

Profit is approx. 35 % (closed trades only, before fees) until today. This percentage is related to the account size end of 2015. (Total account, approx. 1/4 of the account was used for outright or spread trades.)

Unfortunately my other trading activities (outrights, spreads) were not as successful and reduce the profit of my option selling activities. Thus, I decided to reduce these activities significantly some weeks ago. I might stop them entirely.

Regarding option selling the keys were to stay out of currency trades (see my contribution from about a year ago - I am simply not successful in selling options on currency futures), and to keep lot sizes small. On a quick view I find only three loosing trades that make me unhappy, because they were either managed improperly or I should not have entered them.

I will compile a more detailed report at the end of Q2. But feel free to ask if there remain open questions.

Best regards, Myrrdin

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Old June 4th, 2016, 01:14 PM   #236 (permalink)
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myrrdin View Post
Regarding option selling the keys were to stay out of currency trades (see my contribution from about a year ago - I am simply not successful in selling options on currency futures)


Have you considered buying options in ccy futs, perhaps in very small size, just to test out how well it works for you? If you were consistently losing, applying the same methods but buying instead might prove profitable.

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Old June 4th, 2016, 03:21 PM   #237 (permalink)
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Have you considered buying options in ccy futs, perhaps in very small size, just to test out how well it works for you? If you were consistently losing, applying the same methods but buying instead might prove profitable.

Perhaps.

But my trading style already takes a lot of time as I have to study fundamentals for many different commodities. Thus, I prefer to work with only one trading method, that is successful for me - option selling.

The way we trade successfully is related to our personality. And for me selling options works for many years.

Best regards, Myrrdin

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Old June 6th, 2016, 09:08 AM   #238 (permalink)
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Added to the short KCU C155.

The only reason for the move up on Friday seems to be USD weakness.

Weather forecast for Vietnam looks better now, rain problems in Brazil causing less transports of coffee to the coast seem to be a temporary problem.

Best regards, Myrrdin

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Old June 6th, 2016, 10:38 AM   #239 (permalink)
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Sold the WU C6.

Wheat prices moved upwards with the move down of the USD, but fundamentals (weather, S&D) are very bearish. Severe weather problems in one of the major wheat producing countries of the Northern Hemisphere would be necessary to turn the outlook bullish.

Best regards, Myrrdin

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Old June 6th, 2016, 12:27 PM   #240 (permalink)
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Bought back the CLV C65 with a profit of 20 %.

Volatility has come down rapidly after the OPEC meeting last week. I intend to re-enter this trade in the coming weeks at higher prices.

Best regards, Myrrdin

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