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Diversified Option Selling Portfolio
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Diversified Option Selling Portfolio

  #521 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
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rajab View Post
Anyone try Ron99's 1 short 2 longs(ES) on CL?

Say 1 short CLG-C60 and 2 long CLG-C70?

Thought?

On 20160209 CL futures were 32.74. If you sold a 42 call and bought two 52 calls here is the result when futures increased to 42. Margin call and 60% draw down when using 6X IM.

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Selling a CL call only 10 away from futures is very risky. Ten point moves up in CL in 56 days are fairly common.

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Last edited by ron99; October 21st, 2016 at 02:02 PM.
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  #522 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,570 since Jul 2011
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Here is what happened if you sold a CLm6c42 on the same day using 3X IM. No margin call and max of 30.3% draw down.

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Now if the move was faster and higher the result wouldn't have had a happy ending like this one.

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  #523 (permalink)
Trading Apprentice
westhills california US
 
Futures Experience: Beginner
Platform: TOS
Favorite Futures: FOREX,STOCKS,FUTURES
 
Posts: 43 since May 2015
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I know this topic has been talked about.

What would be a fair % of total profit/loss to spend on commissions and fees? per trade?
General example: If I place a trade for ES puts 10 short(1750) 20 long(1550) I end up paying $84.00 one way. Expensive. Am I looking at this the wrong way?


I have read some of the comments on TOS and I am about to change to one of the recommended brokers.

Thoughts please?

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  #524 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,570 since Jul 2011
Thanks: 739 given, 4,405 received
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rajab View Post
I know this topic has been talked about.

What would be a fair % of total profit/loss to spend on commissions and fees? per trade?
General example: If I place a trade for ES puts 10 short(1750) 20 long(1550) I end up paying $84.00 one way. Expensive. Am I looking at this the wrong way?


I have read some of the comments on TOS and I am about to change to one of the recommended brokers.

Thoughts please?

That's not expensive. I would pay $183.60 round turn for 30 contracts. $5.56 to enter position per contract and $0.56 to exit.

You get what you pay for. IB is real cheap but how they treat option sellers is poor.

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  #525 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
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Favorite Futures: Commodities
 
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ron99 View Post
That's not expensive. I would pay $183.60 round turn for 30 contracts. $5.56 to enter position per contract and $0.56 to exit.

You get what you pay for. IB is real cheap but how they treat option sellers is poor.

I fully agree. I was customer of IB, but left them because of their poor service regarding option selling. (Eg. forced liquidation because of severely incorrect calculation by IB).

You should stay with your broker as long as you are satisfied with the service. Commission seems to be ok.

Best regards, Myrrdin

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  #526 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 879 since Nov 2014
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Current open positions:

SF7 C10
SN7 P9

I intend to hold both positions longterm.

KCH C210

I intend to add KCH P130 or similar to achieve a strangle within the next couple of days. On the one hand, COT data and seasonals show a bearish tendency, on the other hand coffee is in an "off year" in Brazil, and there are relatively small crops in Vietnam, India and Indonesia.

CLG C63-68

I might take profit on a setback. Volatility should rise as the November OPEC meeting gets closer. Ron99 and others: Do you intend to hold your CL calls through the OPEC meeting ?

EWF P1900

Intend to roll at approx. 50 %.

Best regards, Myrrdin

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  #527 (permalink)
Market Wizard
Linz Austria
 
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Further plans:

Sell the WH C500 (or similar) at a price of 450 - 460 of the outright.

Sell the CF C370 just above current level.

World-wide there is a lot of grains, and weather in South America looks promising. Seasonals are bearish for both commodities after end of October.

Best regards, Myrrdin

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  #528 (permalink)
Trading Apprentice
Montreal quebec
 
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Holding my CL 40-65 strangle actually at 40% looking to close it at 50% profit. Volatility is too low to sell options actually, will probably sell some strangles once we have some decent vol.

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  #529 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 879 since Nov 2014
Thanks: 1,267 given, 825 received
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Pirolyx View Post
Holding my CL 40-65 strangle actually at 40% looking to close it at 50% profit. Volatility is too low to sell options actually, will probably sell some strangles once we have some decent vol.

I expect volatility to rise before the next OPEC Meeting on November 30th in Vienna.

Best regards, Myrrdin

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  #530 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,570 since Jul 2011
Thanks: 739 given, 4,405 received
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My CL call spread has dropped 35% in premium. I expect to be out this week when prices drop because inventory rising with more imports in this week's report. We'll see if I am right or blowing hot air.

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