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Selling Options on Futures?


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Selling Options on Futures?

  #7231 (permalink)
 meyer99 
Charlotte NC
 
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Any gold trade ideas? Or it is too late?

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  #7232 (permalink)
 myrrdin 
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meyer99 View Post
Any gold trade ideas? Or it is too late?

If anything, I would use the relatively high volatility to sell very wide strangles. But in my opinion there are better trades around.

I prefer trading the metals via futures currently.

Best regards, Myrrdin

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  #7233 (permalink)
 myrrdin 
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Just took up Ron's idea from some time ago and sold some ESZ 1xP2000-2xP1500 spreads for 100 USD each.

I am aware of the risk of this type of position, and, thus, current margin is only approx. 5 percent of account size.

Best regards, Myrrdin

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  #7234 (permalink)
 meyer99 
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Which DTE? You got a credit?

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  #7235 (permalink)
 myrrdin 
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meyer99 View Post
Which DTE? You got a credit?

ESZ denotes the ES future with expiry in December. Expiry date this year is the 18th of December.

Yes, I received a credit of 100 USD per spread.

Best regards, Myrrdin

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  #7236 (permalink)
 
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 SMCJB 
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11:49 Friday 30th with ES at 3254 the EW1 3255 straddle is worth 156. That's a premium equal to 4.8% of the underlying for a 1 week option!

Alternatively the 3090/3415 Strangle (both strikes 5% out of the money) is worth 43.5 a premium equal to 1.3% so in "it ain't ever going there" math it would require a 6.3% move to lose money!

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  #7237 (permalink)
 
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 SMCJB 
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Should have added, in 2016 between Fri 4th and Friday 11th the S&P500 had a range of 2083 (Friday 4th low) to 2182 (Thursday 10th High) which is 99 points or about 4.7%

S&P500 doesn't trade at night though! The ESZ16 future had a range of 2028 (Wednesday low) to 2180 (Thursday high) which was 152 points or over 7%

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  #7238 (permalink)
Sagal
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meyer99 View Post
Any gold trade ideas? Or it is too late?

You are on the topic of selling options right?
So it is only me of course and I wouldn't do it myself because gold volatility is low (implied volatility 20.7%), there is a lot at stake (100 dollars the point for a contract) and I am fully invested in gold already with ETF physical but a naked put options strike at 1850 (aggressive) or 1750 (conservative) should work with an expiry on 23 February 2021 (GCJ21)

Edit 1 It seems I am late for the reply but when clicking on the link and last page it is only your post I saw
Edit 2 Of course you can sell 1850 and buy 1750 same expiry.

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  #7239 (permalink)
 
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 SMCJB 
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For those premium sellers out there...

With CME Mar21 Bitcoin quoted 18050, the Mar21 20000 Calls are 2400/2650!

If we say the 20000 strike is 10.8% out of the money and 2400 represents a 13.3% premium of the underlying, we get these comparisons...

With ES Mar21 quoted 3601 the 3210 Put (10.9% OTM) is worth 72.5 (2% premium)
With ES Mar21 quoted 3601 the 4000 Call (11.1% OTM) is worth 26 (0.7% premium)

With CL Mar21 quoted 4190 the 4650 Call (11.0% OTM) is worth 137 (3.3% premium)

Obviously expiration's don't line up exactly but you get the picture!

Of course Nov20 Bitcoin is currently 74% above it's early September lows!

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  #7240 (permalink)
 jokertrader 
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Rich as it sounds don’t think I’m gonna take the risk of my getting my head handed to me !!!!


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