Diversified Option Selling Portfolio - Options on Futures | futures io social trading
futures io futures trading


Diversified Option Selling Portfolio
Updated: Views / Replies:44,381 / 881
Created: by myrrdin Attachments:57

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 57  
 
Thread Tools Search this Thread
 

Diversified Option Selling Portfolio

  #81 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 901 since Nov 2014
Thanks: 1,302 given, 881 received
Forum Reputation: Legendary


satghost View Post
I am also interested in your trading. At the moment I am concentrating on the ES puts ...

In my opinion this is a good place to start in case you do not have a special affinity to one of the other commodities, and are interested to study its fundamentals.

There is the risk to place too much money on one trade - be careful. We have seen in August that this trade can go against you and prduce severe losses in case the (mental) stop loss is not placed properly with regard to the account size.

In famous books you can read that strikes can be chosen far out of the money, and that the underlying future will never get there. But this is not the point. The value of the option rises when (in this case) the ES drops, and volatility rises. And within some days or even hours you are forced to get out of the trade, taking a severe loss.

Thus, keep the trade small.

Good luck !

Best regards, Myrrdin

Reply With Quote
The following user says Thank You to myrrdin for this post:
 
  #82 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
Platform: QST
Broker/Data: QST, DeCarley Trading, Gain
Favorite Futures: Options on Futures
 
Posts: 2,616 since Jul 2011
Thanks: 756 given, 4,492 received
Forum Reputation: Legendary


myrrdin View Post
The value of the option rises when (in this case) the ES drops, and volatility rises. And within some days or even hours you are forced to get out of the trade, taking a severe loss.

Of course if you have properly placed longs to cover your shorts a flash move will not hurt you.

Reply With Quote
The following 3 users say Thank You to ron99 for this post:
 
  #83 (permalink)
Trading Apprentice
Munich Germany
 
Futures Experience: Advanced
Platform: TWS
Favorite Futures: ES
 
Posts: 13 since Sep 2015
Thanks: 49 given, 14 received


Yes, I have seen this and been also following Ron's thread.

Seems like you are still selling naked ES puts, not the 1:2 short/long which is delivering the best span margin results. And using your own exit strategy.
At the moment the 200 DMA of the S&P is about 2062, does this mean, you are buying back all ES put, when S&P is droping about 50 Points below 2062?

Reply With Quote
The following user says Thank You to satghost for this post:
 
  #84 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 901 since Nov 2014
Thanks: 1,302 given, 881 received
Forum Reputation: Legendary


ron99 View Post
Of course if you have properly placed longs to cover your shorts a flash move will not hurt you.

Yes, placing long puts properly avoids this issue. The problem I see is to choose the long puts in a way to work properly under all conditions. Backtesting is usually done assuming conditions we know from the past. But is has happened that conditions differ from those in the past, and this might lead to problems.

Therefore, I prefer to get out at a pre-defined stop loss, which currently is the 200 dma of the S&P index.

On the one hand, I got out of the problems after 20th August with minor losses. On the other hand, I let money on the table, as I also got out of the trade after a close of the S&P below the 200 dma on 8th of July.

I am aware that there are many ways to make money, selling ES puts.

Best regards, Myrrdin

Reply With Quote
The following 3 users say Thank You to myrrdin for this post:
 
  #85 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 901 since Nov 2014
Thanks: 1,302 given, 881 received
Forum Reputation: Legendary


satghost View Post
Yes, I have seen this and been also following Ron's thread.

Seems like you are still selling naked ES puts, not the 1:2 short/long which is delivering the best span margin results. And using your own exit strategy.
At the moment the 200 DMA of the S&P is about 2062, does this mean, you are buying back all ES put, when S&P is droping about 50 Points below 2062?

Yes, I am still selling naked ES puts, which I hedge from time to time via ES outright futures. (I am hedged since yesterday before the close.)

I take the 200 dma of the S&P index and not of the ES future. This avoids the problem of linking different contracts to each other. The 200 dma of the index currently is at 2035, The index itself at 2108.

I intend to buy back the ES puts on a close below the 200 dma of the index. This happenened twice since I started using Ron's program in spring of this year (8th of July, 20th of August).

Best regards, Myrrdin

Reply With Quote
The following 3 users say Thank You to myrrdin for this post:
 
  #86 (permalink)
Trading Apprentice
Munich Germany
 
Futures Experience: Advanced
Platform: TWS
Favorite Futures: ES
 
Posts: 13 since Sep 2015
Thanks: 49 given, 14 received


myrrdin View Post
..
I take the 200 dma of the S&P index and not of the ES future. This avoids the problem of linking different contracts to each other. The 200 dma of the index currently is at 2035, The index itself at 2108.

I intend to buy back the ES puts on a close below the 200 dma of the index. This happenened twice since I started using Ron's program in spring of this year (8th of July, 20th of August).

The close below 200 dma, seems a interesting exit criteria for me.

If you exit after a close below the 200 DMA, when will you start selling again? F.e. SPX was below 200 DMA this year between Aug 20th and Oct 21th.
From your postings, you started selling again at the beginning of Oct. And from looking at the SPX chart, since then the SPX won more than 200 points. Nearly the perfect point for starting

Reply With Quote
 
  #87 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 901 since Nov 2014
Thanks: 1,302 given, 881 received
Forum Reputation: Legendary


satghost View Post
The close below 200 dma, seems a interesting exit criteria for me.

If you exit after a close below the 200 DMA, when will you start selling again? F.e. SPX was below 200 DMA this year between Aug 20th and Oct 21th.
From your postings, you started selling again at the beginning of Oct. And from looking at the SPX chart, since then the SPX won more than 200 points. Nearly the perfect point for starting

Yes, as you found out correctly I start selling options again below the 200 dma in case I made out a turn around. Sometimes - as in this case - the index moves far below the 200 dma, and it makes sense to start selling again.

In this case of more risky trades it is essential for me to keep lot sizes reduced, and to have a good place to get out again (stop loss) or to hedge.

One other important point: I consider the re-entry as an individual trade, and enter it with a lot size independent of the losing trade. Usually when I get out of the trade below the 200 dma, the options are above 100 %, and the trade results in a loss. Many option sellers now try to sell this amount at a lower level, thus, placing a rather large trade to "take revenge". It is important to forget about the trade that brought the loss, and to start again with a reduced or normal lot size.

Best regards, Myrrdin

Reply With Quote
The following 4 users say Thank You to myrrdin for this post:
 
  #88 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 901 since Nov 2014
Thanks: 1,302 given, 881 received
Forum Reputation: Legendary

Current positions of my option selling portfolio:

CH P340
BOH P26
SH P800

LHG P60
LCG P130
LCG C156

ESF P1725
ESG P1600
ESG P1650
ESG P1680
ESG P1700
ESG P1720

The Lean Hog Puts are in the money, but I intend to hold them. For several reasons I am convinced that the price will move up again. Among others, cash prices are significantly higher than future prices. This difference is much larger as usually during this time of the year. And even using very pessimistic assumptions, the cash price in February (and December) should be significantly above 60. Last but not least, there is a lot of time left until my options expire.

I sold a third of a lot of the Soybeans Put at 9 cents, and placed further orders at 12 and 15 cents. I scale into these options, as I am not sure how far price will go down. But somewhere between 830 and 880 the Chinese will start buying again, and planting intentions in the US will be reduced.

I am hesitant selling Gold or Silver puts again. Palladium reacted much stronger on yesterdays numbers, and, thus, I bought it outright. (Option open interest in Palladium tends against zero.)

ES puts are currently fully hedged.

Best regards, Myrrdin

Reply With Quote
The following 6 users say Thank You to myrrdin for this post:
 
  #89 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 901 since Nov 2014
Thanks: 1,302 given, 881 received
Forum Reputation: Legendary

On my watch list for option selling there are the following positions:

SH P800: I am currently scaling into this position. In my opinion, the seasonal low should be close.

CLK P45: I intend to sell this option again in November or December on a further move down. Probably I will also scale into this position.

KC puts: Coffee price has not been below 100 since 2007. Thus, I intend to scale into some KCK puts within the next two months. Seasonals begin moving upwards strongly in the middle (last 5 years) or end (last 15 years) of December.

Usually at this time of the year I sell Natural Gas options. I am careful in this regard, as El Nino could bring a warm winter in the US, which makes it dangerous to sell puts. Selling calls is not interesting and dangerous at current price levels - one cold blast, and the options gain value extremely fast.

Best regards, Myrrdin

Reply With Quote
The following 2 users say Thank You to myrrdin for this post:
 
  #90 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
Posts: 901 since Nov 2014
Thanks: 1,302 given, 881 received
Forum Reputation: Legendary



myrrdin View Post

CLK P45: I intend to sell this option again in November or December on a further move down. Probably I will also scale into this position.

Sold a first lot of CLK P45@3.17 .

Intend to sell further options at higher prices if possible.

Best regards, Myrrdin

Reply With Quote
The following user says Thank You to myrrdin for this post:

Reply



futures io > > > > Diversified Option Selling Portfolio

« PC-SPAN | - »
Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

July Journal Challenge w/$1100 in prizes from TopstepTrader

July

John @ No BS Day Trading (TBA)

Elite only

An Afternoon with FIO member Softsoap (being rescheduled)

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Webinar: Option Selling with and without insurance w/Carley Garner Big Mike Options on Futures 50 March 24th, 2015 05:52 PM
Portfolio Trader no erocla MultiCharts 1 November 27th, 2014 10:56 AM
"DTS" Diversified Trading System - Anybody out there!? ShaunG Trading Reviews and Vendors 2 July 30th, 2014 05:54 AM
Diversified Trading Systems soch Trading Reviews and Vendors 3 February 18th, 2013 09:12 PM
Portfolio Construction dgresens Psychology and Money Management 3 October 25th, 2012 03:33 AM


All times are GMT -4. The time now is 11:33 PM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-06-25 in 0.09 seconds with 20 queries on phoenix via your IP 54.162.237.53