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Diversified Option Selling Portfolio
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Diversified Option Selling Portfolio

  #711 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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Sold CCu7p1600 for 14 today. IM is $517.

CC seems to drop into the last trading day of CCk before the first notice day for that contract. Then it rises after that.

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  #712 (permalink)
Market Wizard
Linz Austria
 
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ron99 View Post
Sold CCu7p1600 for 14 today. IM is $517.

CC seems to drop into the last trading day of CCk before the first notice day for that contract. Then it rises after that.

Seasonals and COT data support this trade, but S&D is still bearish. Last year's El Nino had its most negative impact on the 2015/2016 mid crop production. Thus, Ivory Coast and Ghanaian output over the next few weeks will probably come in ahead of last years level.

I am bullish Cocoa for quite a while, and already lost some money being long this commodity. Currrently I am not invested.

Although I think 1600 should hold I will not enter this trade in the short term.

Best regards, Myrrdin

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  #713 (permalink)
Trading for Fun
Minnesota
 
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Being pretty new to selling options I have some questions regarding margins. Still doing it old school with a broker where I can sit down in thier chair. I ask them what they think about my trade(s) an go from there. Never asked about margins or anything.
I have been reading quit a lot on here an on the net. Just so all know I have found some valuable info here. Still have questions on margins.
I understand margins on options are less than the contract, however that can be adjusted by the brokerage to a higher side. Always went one way long or short, now trying to understand more about strangles an such. Understanding
My 2 questions are!
Is there a difference in margins if if one sells a strangle as to selling a naked one? As one offsets the other?
The other thing I would like to know is if one can figure it out on thier own, is there a formula or a website?

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  #714 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 1,032 since Nov 2014
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Currently I hold the following positions in the short options portfolio:

LHQ P64
longterm trade.

LCQ P94
LCM C121
longterm trade, entered the first leg end of March and the second one recently.

KWN P4.1
Intend to take profit around 50 %. (Second entry, after already taking 50 % short time ago.)

CLM C55
Shortterm trade, entered after the reversal on April 12th. I rarely enter trades with less than 40 DTE.

NGN P2.8
NGU C4.5

NGQ P2.6
NGQ C4.5
Large position, I have a lot of confidence that NG will move more or less sidewards for some weeks.

EW3N P2000
EW3N P2025
EW3N P2030

Best regards, Myrrdin

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  #715 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
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Plans for new short option trades:

I already placed an order to sell the CN P3.6 .

COT data is bullish, and any weather adversity should move the corn price higher.

Large crop from South America should be priced in.

3.6 is support since October, and has been tested successfully 5 times.

I intend to sell CL calls 100 - 120 DTE on a move upwards, preferably to the 55 - 60 area. This move could occur in May or June due to seasonality and due to the decision of OPEC to cut production for some more months. This discussion might increase volatility.

Best regards, Myrrdin

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  #716 (permalink)
Market Wizard
Linz Austria
 
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TraderGriz View Post
Being pretty new to selling options I have some questions regarding margins. Still doing it old school with a broker where I can sit down in thier chair. I ask them what they think about my trade(s) an go from there. Never asked about margins or anything.
I have been reading quit a lot on here an on the net. Just so all know I have found some valuable info here. Still have questions on margins.
I understand margins on options are less than the contract, however that can be adjusted by the brokerage to a higher side. Always went one way long or short, now trying to understand more about strangles an such. Understanding
My 2 questions are!
Is there a difference in margins if if one sells a strangle as to selling a naked one? As one offsets the other?
The other thing I would like to know is if one can figure it out on thier own, is there a formula or a website?

Yes, margin for a strangle is significantly lower than margin for a naked option. But it is larger than margin for a naked option.

All trading tools I know allow for calculation of margin for options or for a combination of options. I do not know about a formula on this site or in the internet, but I never looked for one. As long as you trade with a full service broker I would ask him - you pay him.

Best regards, Myrrdin

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  #717 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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TraderGriz View Post
Being pretty new to selling options I have some questions regarding margins. Still doing it old school with a broker where I can sit down in thier chair. I ask them what they think about my trade(s) an go from there. Never asked about margins or anything.
I have been reading quit a lot on here an on the net. Just so all know I have found some valuable info here. Still have questions on margins.
I understand margins on options are less than the contract, however that can be adjusted by the brokerage to a higher side. Always went one way long or short, now trying to understand more about strangles an such. Understanding
My 2 questions are!
Is there a difference in margins if if one sells a strangle as to selling a naked one? As one offsets the other?
The other thing I would like to know is if one can figure it out on thier own, is there a formula or a website?

Margin can be acquired on several trading platforms. You can also get it using XLS-SPAN available in the PC-SPAN thread here.

The margin for a strangle is about the same as one side naked depending on if they are equal deltas.

EDIT: I am adding that XLS-SPAN has exchange minimum margin. Your broker may use a higher margin.


Last edited by ron99; April 18th, 2017 at 11:20 AM.
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  #718 (permalink)
Elite Member
Germany
 
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ron99 View Post
Margin can be acquired on several trading platforms. You can also get it using XLS-SPAN available in the PC-SPAN thread here.

The margin for a strangle is about the same as one side naked depending on if they are equal deltas.

Three things I would like to add:
- different commodities can have signifcantl different margin requirements. E.g. GC has quite a high margin, whilst NGs is much lower.
- different people ma have different margins. On a different group I compared margins with other users of the same broker (IB) and there were considerable differences.
- it seems some brokers are much more accommodating for option traders and have lower margins than others.

If you can ask our broker for margins for a specific trade you could post it here and we can compare.

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  #719 (permalink)
Market Wizard
Linz Austria
 
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manuel999 View Post
Three things I would like to add:
- different commodities can have signifcantl different margin requirements. E.g. GC has quite a high margin, whilst NGs is much lower.
- different people ma have different margins. On a different group I compared margins with other users of the same broker (IB) and there were considerable differences.
- it seems some brokers are much more accommodating for option traders and have lower margins than others.

If you can ask our broker for margins for a specific trade you could post it here and we can compare.

1. It is correct that different commodities have significantly different margin requirements. Also margin requirement for a commodity changes from time to time, depending on volatility for the respective commodity.

2. As far as I know all traders get the same margin requirement for the same commodity at one broker. The only exception I know is the very rare case of traders who have caused severe problems for their brokers, and who therefore get higher margin requirements. But: Margin requirement is calculated based on the total account. Example: You have an empty account, and you add a short naked corn call option. Another Trader has one long soybean future in his account, and he adds the same short naked corn call option. You will get a higher margin requirement than the other trader as the long soybean future is considered as a partial offset.

3. Yes, there are brokers who appreciate the business with option writers, and there are brokers who do not appreciate this business. If you look around in this thread and in Ron's thread ("Selling Options on Futures ?") you will find some discussion on various brokers. There is a number of brokers around who use the minimum margin requested by the exchanges. IB is not among them.

In case you are interested in the minimum margin requirement for a position please feel free to post it here, and I will give you the figure.

Best regards, Myrrdin

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  #720 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,700 since Jul 2011
Thanks: 781 given, 4,720 received
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manuel999 View Post
Three things I would like to add:
- different commodities can have signifcantl different margin requirements. E.g. GC has quite a high margin, whilst NGs is much lower.
- different people ma have different margins. On a different group I compared margins with other users of the same broker (IB) and there were considerable differences.
- it seems some brokers are much more accommodating for option traders and have lower margins than others.

If you can ask our broker for margins for a specific trade you could post it here and we can compare.

I suspect there may be different margin requirements based on the country where you live. Anybody know for sure on that?

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