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I do not intend to sell CL options in the near future. Risk in both directions outweighs profit potential in my opinion.
I would prefer to buy / sell outright futures in case I had a strong opinion on the direction of CL price.
The advantage of trading futures: You have a high risk, but also a high profit potential. Selling options, you have a high risk, but a low profit potential.
I prefer selling options in a low risk environment.
Hi Myrrdin, thats exactly my current problem, I feel like there arent that many opportunities at the moment so I have to be patient and stay on sidelines.
I hold some short NG put position but watch it closely cause of bearish NG outlook (Im still very far OTM). I messed up with Corn and was down 2%, looking to get back into Corn Calls if the situation is favorable in a few weeks at the end of the harvest, but right now nothing seems very attractive.
I will be looking into Coffee and Cocoa in the coming weeks, last year this trade worked well for me but Ill research fundamentals more in depth before making any trades. Besides that, right now there arent many appealing trades to me.
Maybe, just maybe I will sell NG calls very far OTM if volatility shots up in the next few months.
Selling NG puts in these days would hurt on of my basic trading rules: Never sell NG option in Z, F, G, or H contracts. Neither puts nor calls. I am currlntly long the NGH C3, waiting for a cold blast in the US.
I bought a far OTM NG put as a protection for my short put position, this is the 1st time I bought an option. In my mind I bought it to protect myself from big downturns that goes along with increase in volatility, but it still amazes me a little of how NG price has declined and yet my put not even once increased in price. Not even once it was in profit zone. Just closed it yesterday.
Probably should learn from you and buy a lottery ticket for myself too.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
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Posts: 5,049 since Dec 2013
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When prices get very low, it's normally because of large supply surplus. In situations like these the chance of sustained volatility is also low, so volatility goes down as prices go down. The opposite is true at higher than normal prices. Been trading some eurodollar options recently and they are behaving the same. Price and Implied Volatility quiet highly correlated.
I was wondering if you could tell me if 70k is enough to conservatively write commodity options for a goal income of around 2% per month? So roughly 1500?
I trade thorough IB now and do a bit of futures trading but was going to switch to Carley for the sole purpose of selling options. Before I go through the hassle of closing and opening accounts, I would appreciate your opinion.
After a while, I entered again a "classical" short option trade, and sold the KCH C140/P95 strangle.
Volatility has grown recently, and allows for selling this rather wide spread at an acceptable price.
There is a lot of coffee around, and, thus, I do not see a coffee price of above 130 in the near future. COT data and weather isues in Vietnam should prevent the March contract to move below 1.
I intend to buy the strangle back step by step from 60 % to 25 % of potential profit, and placed such order.
As a small short term play, I sold the LHZ C70/P58 strangle.
Volatility is high due to the discussions with China. But I do not think a lot of additional pork will go to China because of progress in the negotiations against the December contract.
I will exit the strangle step by step between 60 % and 25 %, and placed such order.
This trade has a higher risk than many of my other trades, and should be placed very carefully.
