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Diversified Option Selling Portfolio
Started:September 6th, 2015 (11:22 AM) by myrrdin Views / Replies:26,366 / 581
Last Reply:December 2nd, 2016 (01:20 PM) Attachments:38

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Diversified Option Selling Portfolio

Old September 22nd, 2015, 03:38 AM   #21 (permalink)
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Bought back USZ C160 with a profit of 24 %. Intend to sell USZ or USH calls again in the high 150s.

Best regards, Myrrdin


Last edited by myrrdin; September 22nd, 2015 at 03:39 AM. Reason: Correct typing error
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Old September 22nd, 2015, 07:15 AM   #22 (permalink)
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Sold SIH P14 on the move of the outright down below 15.

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Old September 22nd, 2015, 10:18 AM   #23 (permalink)
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Hi @myrrdin , last night I placed a short on november mini soybeans, it would seem to me that despite the current range, prices will keep on trending lower.

The previous inversion (during harvest) did little for the bulls, Commercials are net long compared to previous week (again) and open interest started building up showing new money is flowing into this market...

I wonder if you have any insights on this.

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Old September 22nd, 2015, 10:43 AM   #24 (permalink)
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ElChacal View Post
Hi @myrrdin , last night I placed a short on november mini soybeans, it would seem to me that despite the current range, prices will keep on trending lower.

The previous inversion (during harvest) did little for the bulls, Commercials are net long compared to previous week (again) and open interest started building up showing new money is flowing into this market...

I wonder if you have any insights on this.

I agree, I am also in a trade shorting Soybeans, but not within my option selling program. I sold the SX5-SN6 spread in early September.

There is a number of arguments for lower prices, namely weather (rain in Brazil to support planting, no risk of frost in Northern America) and increasing harvest in the US. But the potential for lower prices should be limited, as harvest is ongoing. The seasonal low according to MRCI is in the first half of October.

I intend to buy back my spreads at -19.5 c (currently -17.25).

Best regards, Myrrdin

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Old September 22nd, 2015, 12:25 PM   #25 (permalink)
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Futures Edge on FIO
Sold the ESZ P1400 at 4.4 using a tight stop.

Best regards, Myrrdin

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Old September 22nd, 2015, 02:28 PM   #26 (permalink)
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myrrdin View Post
Sold the ESZ P1400 at 4.4 using a tight stop.

Best regards, Myrrdin

Back out at 4.7 .

Myrrdin

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Old September 22nd, 2015, 06:09 PM   #27 (permalink)
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How long do you hold a position?

For 50% target profit of your premium received?

Do you use options greeks at all?

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Old September 23rd, 2015, 09:23 AM   #28 (permalink)
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dkpmba View Post
For 50% target profit of your premium received?

Do you use options greeks at all?

If profitable, I exit at 10 – 50 % of the entry price. Otherwise, I exit at approx. double the entry price. Usually I choose a chart criteria for the underlying future which is close to this condition (or closer, eg. at 120 % or 150 %). I also exit if fundamentals have changed significantly. After exiting trades, I sometimes „roll“ the trade to a new option. But only after careful study of the fundamentals.

I have a look at the greeks, but they do not play an essential role for my trading. The reason is simple: I spend a lot of time studying fundamentals, and there simply is not enough time to spend on finding the perfect delta, DTE, etc. Traders who try to be perfect in this regard - eg. Ron - prefer to trade only a limited number of commodities, whereas I trade approx. 40.

I will explain how I proceed using an example: Yesterday I sold the SIH P14. Basis of the trade were fundamental studies (regarding inflation, supply and demand, COT data, seasonals etc.) by several authors. I came to the conclusion that the low should be in, and that cash prices for silver should rise after November. I decided to choose a rather close to the money option (instead of a larger number of farther OTM options) to reduce the risk of huge losses if the trade goes strongly against me, and to reduce margin requirement. I will exit the trade on a close below the low around 14. Thus, I decided to wait until a retest of 15. Here I could sell the options at a price that would allow to stay in the trade down to 14, and to have the option approximately doubled when being stopped out. (The exact price at this level depends on volatility, time of exit. etc.)

Why did I choose the March contract ? I expect rising silver prices through 2016, and want to take profit for as long as possible. But I usually do not sell options beyond 180 DTE.

I hope I could make my procedure clear. Sorry - I am not a native speaker. In case of further questions I will be happy to answer them.

Best regards, Myrrdin

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Old September 23rd, 2015, 10:13 AM   #29 (permalink)
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myrrdin View Post
Bought back LHZ C70 at +/- 0. I do not understand yesterday's large move upwards - too large for simple short covering (for some time even locked limit up) or liquidation of some LC-LH speads. And in case I do not understand moves of a price, I prefer to quit.

Best regards, Myrrdin

Just sold the LHZ C75 at 0.5 . Yesterdays cold storage report was bearish, volatility should come down after the USDA report of Friday after the close.

Best regards, Myrrdin

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Old September 23rd, 2015, 11:42 AM   #30 (permalink)
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Bought back LCZ P130 with a loss of more than 300 %. Did not wait for the close, as LCZ might end up limit down. Terrible trade ...

Best regards, Myrrdin

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