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Diversified Option Selling Portfolio


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Diversified Option Selling Portfolio

  #411 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785

Exited ESx6p1700p1460 2 longs. 38 days held. 2.8% monthly ROI using 6x.

Exited ESx6p1710p1460 2 longs. 37 days held. 3.2% monthly ROI using 6x.

Replaced them with ESz6p1750p1520 2 longs sold for 2.50.

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  #412 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
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Reduced my exposure in the Live Cattle by buying back the LCZ P99 (loss of 50 %) and FCV P126 (80 %).

Best regards, Myrrdin

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  #413 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
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Sold the CLF C58/63 spread at 0.30 .

Intend to exit above the August high.

Best regards, Myrrdin

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  #414 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
Thanks Given: 3,686
Thanks Received: 2,651

Sold the CZ C3.60 before the close yesterday to balance my CZ7-CZ8 spreads I had bought earlier.

The spread should move upwards until end of March (seasonality), but I expect that bottoming will take some time.

Wish all of you in the US a wonderful Holiday Weekend.

Best regards, Myrrdin

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  #415 (permalink)
uuu1965
Riga Latvia
 
Posts: 107 since Jan 2013
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If I need to choose only 3 markets for trading, what do you recommend:
1. Es mini
2. Energy (crude oil or natural gas)
3. ????

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  #416 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
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Thanks Received: 2,651


uuu1965 View Post
If I need to choose only 3 markets for trading, what do you recommend:
1. Es mini
2. Energy (crude oil or natural gas)
3. ????

The question is not easy to answer, and the answer will be time-dependent.

In recent years there were months with a strong correlation between the ES and CL. On the other hand, the ES was good for selling puts (significantly higher price of OTM puts than for calls), and CL was good for selling calls. CL shows nice seasonals.

NG looks like a good choice as it is almost independent from the $. Currently there are not many imports and exports for the US. This might change in future, when more NG is traded around the world. But: NG price depends to a high degree on the weather (temperatures), and weather is hard to predict. March contract is well known for its huge moves, when a cold snap moves into the US. CL price depends on more influencies, which might cancel out each other (eg. US $, politics in the oil producing countries, temperatures, traffic)

Among grains and beans, all of them have their merits. But not all year around. There are times when weather is the only major influence on price, and your options rise in value significantly within a few days. And there are times when volatility comes down after a weather market, and interesting trades might develop. Grains and beans show nice seasonals, which helps.

Among the softs, I prefer coffee. Option prices - namely for calls - for very far OTM strikes often are high. But also coffee has its weather markets. Currently we enter the critical blooming period in South America.

Among the meats I would prefer hogs. Live cattle recently showed some tendency to correlate with the Indices.

I stopped selling options in the currencies, and I rarely sell options in the metals. In case you like the metals I would prefer Gold.

Whereas it does make sense to permanently be short ES puts, I do not think such concept does make sense for the commodities discussed above. Ron also discussed this in his thread.

What should you finally look at ? You should chose commodities you like to spend time with. You will have to read a lot about supply & demand, seasonals, weather, COT data etc. You should consider for which commodities you have
good sources or are able to get them.

If I had to make a choice today, I would take ES, CL, W, and KC.

Best regards, Myrrdin

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  #417 (permalink)
uuu1965
Riga Latvia
 
Posts: 107 since Jan 2013
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myrrdin View Post
The question is not easy to answer, and the answer will be time-dependent.

In recent years there were months with a strong correlation between the ES and CL. On the other hand, the ES was good for selling puts (significantly higher price of OTM puts than for calls), and CL was good for selling calls. CL shows nice seasonals.

NG looks like a good choice as it is almost independent from the $. Currently there are not many imports and exports for the US. This might change in future, when more NG is traded around the world. But: NG price depends to a high degree on the weather (temperatures), and weather is hard to predict. March contract is well known for its huge moves, when a cold snap moves into the US. CL price depends on more influencies, which might cancel out each other (eg. US $, politics in the oil producing countries, temperatures, traffic)

Among grains and beans, all of them have their merits. But not all year around. There are times when weather is the only major influence on price, and your options rise in value significantly within a few days. And there are times when volatility comes down after a weather market, and interesting trades might develop. Grains and beans show nice seasonals, which helps.

Among the softs, I prefer coffee. Option prices - namely for calls - for very far OTM strikes often are high. But also coffee has its weather markets. Currently we enter the critical blooming period in South America.

Among the meats I would prefer hogs. Live cattle recently showed some tendency to correlate with the Indices.

I stopped selling options in the currencies, and I rarely sell options in the metals. In case you like the metals I would prefer Gold.

Whereas it does make sense to permanently be short ES puts, I do not think such concept does make sense for the commodities discussed above. Ron also discussed this in his thread.

What should you finally look at ? You should chose commodities you like to spend time with. You will have to read a lot about supply & demand, seasonals, weather, COT data etc. You should consider for which commodities you have
good sources or are able to get them.

If I had to make a choice today, I would take ES, CL, W, and KC.

Best regards, Myrrdin

Thanks a lot for such exhaustive answer.
Trading any commodities (except ES mini) ask extra time ...
Vielen dank nocheinmal!

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  #418 (permalink)
 jokertrader 
NYC, NY
 
Experience: Intermediate
Platform: Sierra, TT
Broker: N/A
Trading: Spread Researcher and crypto degen
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uuu1965 View Post
Sold LEZ P100/94 spread at 1.125.

Just looked at Live cattle and its fallen off the cliff.. not sure why..
my assumption is seasonally Live cattle should rally into the end of the year - still researching if this is correct

Question: Some option prices on LE in TOS seem strange.. and some seem normal
like Dec 100 put is 3.75/4.00 (bid/ask) vs Dec 98 put which is 0.575/3.125 and then goes back up for 98 put..

Wonder if i can use this anomaly to create a spread and whether i will ever get filled?

Also for the LEZ P100/94 i am seeing 2.05 now. So if both our assumptions are right.. good time to sell right?

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  #419 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
Thanks Given: 3,686
Thanks Received: 2,651


jokertrader View Post
Just looked at Live cattle and its fallen off the cliff.. not sure why..
my assumption is seasonally Live cattle should rally into the end of the year - still researching if this is correct

Question: Some option prices on LE in TOS seem strange.. and some seem normal
like Dec 100 put is 3.75/4.00 (bid/ask) vs Dec 98 put which is 0.575/3.125 and then goes back up for 98 put..

Wonder if i can use this anomaly to create a spread and whether i will ever get filled?

Also for the LEZ P100/94 i am seeing 2.05 now. So if both our assumptions are right.. good time to sell right?

Currently Live Cattle is not traded. Trading begins at 8.30 am (Chicago time). Outside of trading hours bid / ask do not make sense.

You could have a look at the closing prices from yesterday at the CME site.

Live Cattle prices come done because of the low and falling cash price which surprizes me. Holiday business obviously was worse than expected. I will probably get out of the trade today.

Best regards, Myrrdin

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  #420 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
Thanks Given: 3,686
Thanks Received: 2,651


Exited the LCG P96 and the FCV P122.

Probably cattle prices now move upwards, but a stop is a stop.

I do not intend to sell puts in LC or FC in the near future, as I currently do not really understand what is going on in the cattle markets.

Best regards, Myrrdin

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Last Updated on May 26, 2022


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