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Diversified Option Selling Portfolio
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Diversified Option Selling Portfolio

  #741 (permalink)
Trading Apprentice
Chicago, IL, USA
 
Futures Experience: Beginner
Platform: ThinkorSwim Tradestation
Favorite Futures: ES, CL, GC
 
Posts: 14 since Nov 2015
Thanks: 36 given, 7 received

I might be off on this, so the more seasoned guys please correct me... but wouldn't most event-based trading strategies work better if one were to be long rather than short strangle? I mean, if the intent is to capture a move on increased volatility, wouldn't being long both a put and a call be a better strategy?

Of course, position management will become quite important and understanding fundamentals is important as well, but just curious whether event-based strategies are more of a long play rather than a short one?

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  #742 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, TWS, Vantage
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Favorite Futures: Commodities
 
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ys91 View Post
I might be off on this, so the more seasoned guys please correct me... but wouldn't most event-based trading strategies work better if one were to be long rather than short strangle? I mean, if the intent is to capture a move on increased volatility, wouldn't being long both a put and a call be a better strategy?

Of course, position management will become quite important and understanding fundamentals is important as well, but just curious whether event-based strategies are more of a long play rather than a short one?

I buy options very rarely, and this is the reason why I cannot answer the part of your question regarding buying options.

Selling options before an event is risky. I prefer to sell options just after an event or report, when volatility is still at an increased level, but the outcome of the event is already known. Eg., I added to my short ES puts after the open in New York, as the result of the French elections to me seems rather safe.

One problem remains: If there is an event or a report when I am short options longterm, I have to decide if I stay in the trade, reduce postions, or exit before the event. I make this decision case by case.

Buying options before an event might bring the problem of decreasing volatility after the event. The price of the underlying might move, which is favourable for a long strangle. But due to the decreasing volatility there remains a loss.

Best regards, Myrrdin

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  #743 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
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Rare event: I received a fill (unfortunately only one) for 1 KCZ C230 at 1.1 today at the open. Current theoretical price is 0.71 .

I had placed the order some days ago to be filled on a strong move upwards .

Best regards, Myrrdin

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  #744 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
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Broker/Data: DeCarley, IAB, RJO
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Posts: 1,087 since Nov 2014
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Currently I hold the following positions in the short options portfolio:

LHM P66
LHQ P64
Longterm trades.

KWN P4.1
Took profit on the last trade around 50 %, and re-entered. (Third entry, after taking 50 % profit twice.) Weather Looks short-term favourable, but a lot of old crop HRW around.

CCU P1600
Intend to take profit at 50 %.

CTZ C90
Intend to take profit at 50 %. Good marketings, but very large new corp not only from the US.

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. Took profit on part of the NG positions (NGN puts, NGU calls)

EW3N P2025
EW3N P2030
EW3Q P2000
EW3Q P2050

Best regards, Myrrdin

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  #745 (permalink)
Elite Member
Germany
 
Futures Experience: Intermediate
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myrrdin View Post
Currently I hold the following positions in the short options portfolio:

LHM P66
LHQ P64
Longterm trades.

KWN P4.1
Took profit on the last trade around 50 %, and re-entered. (Third entry, after taking 50 % profit twice.) Weather Looks short-term favourable, but a lot of old crop HRW around.

CCU P1600
Intend to take profit at 50 %.

CTZ C90
Intend to take profit at 50 %. Good marketings, but very large new corp not only from the US.

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. Took profit on part of the NG positions (NGN puts, NGU calls)

EW3N P2025
EW3N P2030
EW3Q P2000
EW3Q P2050

Best regards, Myrrdin

I have the following:

NGQ7 P2.4
NGQ7 C4.75

CLM7 P42
CLM7 C60

ZCM7 P330

I just closed the Ron99 ES Spread yesterday, and will enter next week again, in the probably misguided hope that volatility will pick a bit up for the French election.

I am also planning to sell puts on ZN next week.

Since volatility in the futures is mostly quite low, I also started to have small positions in stocks
JNJ May26 P117
QQQ Jun16 P129

All in all I have a harder time than usual to find good trades. Possibly I am too cautious.
I subscribed to MRCI now and will use their info for more ideas. And of course the indo provided here and on Ron's thread.

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  #746 (permalink)
Market Wizard
Linz Austria
 
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manuel999 View Post

All in all I have a harder time than usual to find good trades. Possibly I am too cautious.

There will be times when you find more trades, and others where it is difficult to find good trades. For option sellers it is important to have a large percentage of winners. Thus, being coutious is important. You should also understand what is going on in the markets you trade. And there are times when it is simply not possible to understand before (!) entering a trade what is going on, eg. weather markets in the grains, or political events.

There will also be trades that you miss, because your entry level is not hit. Let them go - there are so many more trades.

Best regards, Myrrdin

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  #747 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
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Favorite Futures: Commodities
 
Posts: 1,087 since Nov 2014
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myrrdin View Post
Currently I hold the following positions in the short options portfolio:

LHM P66
LHQ P64
Longterm trades.

KWN P4.1
Took profit on the last trade around 50 %, and re-entered. (Third entry, after taking 50 % profit twice.) Weather Looks short-term favourable, but a lot of old crop HRW around.

CCU P1600
Intend to take profit at 50 %.

CTZ C90
Intend to take profit at 50 %. Good marketings, but very large new corp not only from the US.

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. Took profit on part of the NG positions (NGN puts, NGU calls)

EW3N P2025
EW3N P2030
EW3Q P2000
EW3Q P2050

Best regards, Myrrdin

Made strangles out of my LH puts by selling the LHM C80 and the LHQ C84.

Added to my Natural Gas position, selling the strangle NGU P2.6/C4.25 .

Best regards, Myrrdin

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  #748 (permalink)
Market Wizard
Cleveland, OH
 
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Sold NGu7p260 for 0.024 today
Sold NGu7c450 for 0.019 today

Attempting to sell NGq7p260 today to balance out my spreads. Already have on NGq7c450.

EDIT: Sold the NGq7p260


Last edited by ron99; April 27th, 2017 at 03:28 PM.
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  #749 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
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Posts: 1,087 since Nov 2014
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Just sold the

LCM C128 and the
LCQ C128

for $400-420 each during the limit-up phase. Yesterday the LCQ C123 had settled at $400 - this is 5 points lower. I assume regular trade tomorrow (no limit move), and volatility to collapse.

Best regards, Myrrdin

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  #750 (permalink)
Trading for Fun
Minnesota
 
Futures Experience: Intermediate
Platform: Sierra chart
Favorite Futures: Orange juice
 
Posts: 89 since Feb 2017
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ron99 View Post
Sold NGu7p260 for 0.024 today
Sold NGu7c450 for 0.019 today

Attempting to sell NGq7p260 today to balance out my spreads. Already have on NGq7c450.

I made that trade myself but further out on the 17th. Going good so far.

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