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Diversified Option Selling Portfolio
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Diversified Option Selling Portfolio

  #931 (permalink)
Trading for Fun
Minnesota
 
Futures Experience: Intermediate
Platform: Sierra chart
Favorite Futures: Orange juice
 
Posts: 86 since Feb 2017
Thanks: 163 given, 36 received


manuel999 View Post
What deltas are you choosing for the option to sell?
I usually have very low deltas, around 3 for naked puts or calls, and 4 - 5 per side for strangles.
Low deltas leave me ample time to react even with violent moves in the underlying.

I am also working full time during the day, and then check in the evening if I have to do something. My advantage though is that im in Europe: in my evening the markets are still open.
Once a trade is open, I find trade (risk) managment does not take much time an effort. you need to have some rules for yourselves in place though, when to exit a trade.

For the trade selection I look at the weekly data, that can be done on the weekend.
I also take ideas from this and the other options thread, namely from Myrrdin and Ron.
Then I open the trade sometimes during the week.

I don't look at dealt as as such. I look for something 15-20% out of the market. I wish I had opportunity in the day but with 14-15 hrs working I lust don't have time. Now I'm just waiting to exit trades placed a bit ago.

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  #932 (permalink)
Market Wizard
Linz Austria
 
Futures Experience: Advanced
Platform: Zaner360, Vantage, Trade Navigator
Broker/Data: DeCarley, RJO
Favorite Futures: Commodities
 
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manuel999 View Post
What deltas are you choosing for the option to sell?
I usually have very low deltas, around 3 for naked puts or calls, and 4 - 5 per side for strangles.
Low deltas leave me ample time to react even with violent moves in the underlying.

I am also working full time during the day, and then check in the evening if I have to do something. My advantage though is that im in Europe: in my evening the markets are still open.
Once a trade is open, I find trade (risk) managment does not take much time an effort. you need to have some rules for yourselves in place though, when to exit a trade.

For the trade selection I look at the weekly data, that can be done on the weekend.
I also take ideas from this and the other options thread, namely from Myrrdin and Ron.
Then I open the trade sometimes during the week.

The problem trading low delta options is that you are rather safe not to get into the money, but they move faster in case of an increase of volatility than ATM options. Thus, you have to keep the lot size at an acceptable level.

Best regards, Myrrdin

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  #933 (permalink)
Elite Member
Germany
 
Futures Experience: Intermediate
Platform: TWS
Favorite Futures: Options on futures
 
Posts: 106 since Jul 2014
Thanks: 211 given, 104 received



myrrdin View Post
The problem trading low delta options is that you are rather safe not to get into the money, but they move faster in case of an increase of volatility than ATM options. Thus, you have to keep the lot size at an acceptable level.

Best regards, Myrrdin

Yes, you are absolutely right.
As a beginner/intermediate my aim is not yet to make a living out of it, but to gain knowledge and practice.
I strife for 10% ROI at the end of the year.

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  #934 (permalink)
Trading for Fun
Minnesota
 
Futures Experience: Intermediate
Platform: Sierra chart
Favorite Futures: Orange juice
 
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manuel999 View Post
Yes, you are absolutely right.
As a beginner/intermediate my aim is not yet to make a living out of it, but to gain knowledge and practice.
I strife for 10% ROI at the end of the year.

I'm practicing for when I retire but aim for more than 10% ROI

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  #935 (permalink)
Trading for Fun
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ron99 View Post
When you sell at lower DTE you have to sell closer to ATM to get decent premium. But that puts you at higher risk.

I'm not sure all understand I sold these back in March. They were left overs from strangles. I was up and down with them but they never hit a bail or exit target. Til shortly before DTE then I couldn't get out. I'm just glad price came up.

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  #936 (permalink)
Market Wizard
Cleveland, OH
 
Futures Experience: Advanced
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TraderGriz View Post
I'm not sure all understand I sold these back in March. They were left overs from strangles. I was up and down with them but they never hit a bail or exit target. Til shortly before DTE then I couldn't get out. I'm just glad price came up.

You have never given us the option or date entered position so we will not understand without details.

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  #937 (permalink)
Trading for Fun
Minnesota
 
Futures Experience: Intermediate
Platform: Sierra chart
Favorite Futures: Orange juice
 
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Thanks: 163 given, 36 received


ron99 View Post
You have never given us the option or date entered position so we will not understand without details.

Guess you are correct 2.95p-3.45c was placed on 4-17. I was not correct when I said March. It was April when I entered. I know it was a pretty tight window but didn't expect it to go as low as it did.

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  #938 (permalink)
Elite Member
Germany
 
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Favorite Futures: Options on futures
 
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TraderGriz View Post
I'm practicing for when I retire but aim for more than 10% ROI

Yes, eventually I would like to have a higher ROI.
While being in practice I am satisfied with a lower ROI. The main gain in that phase is knowledge.

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  #939 (permalink)
Elite Member
Germany
 
Futures Experience: Intermediate
Platform: TWS
Favorite Futures: Options on futures
 
Posts: 106 since Jul 2014
Thanks: 211 given, 104 received


TraderGriz View Post
Guess you are correct 2.95p-3.45c was placed on 4-17. I was not correct when I said March. It was April when I entered. I know it was a pretty tight window but didn't expect it to go as low as it did.

For me NG is much to volatile for that tight a strangle.
E.g.: I opened one at the same time with 2.5P-4.5C

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  #940 (permalink)
Trading for Fun
Minnesota
 
Futures Experience: Intermediate
Platform: Sierra chart
Favorite Futures: Orange juice
 
Posts: 86 since Feb 2017
Thanks: 163 given, 36 received



manuel999 View Post
Yes, eventually I would like to have a higher ROI.
While being in practice I am satisfied with a lower ROI. The main gain in that phase is knowledge.

Yes I agree the main goal is knowledge. This is my learning on selling. I have only bought and entered. In direct contracts previously

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