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Diversified Option Selling Portfolio


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Diversified Option Selling Portfolio

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  #11 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
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Bought back the LCV P132 -P120 for a 52 % profit. Still hold positions in the LCZ P130 and P132.

Bought back the WH P400 for a 53 % profit within a few days. Intend to sell it again at a higher price.

Sold the CH C5 to hold a strangle with the CH P340.

Best regards, Myrrdin

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  #12 (permalink)
Forex37
Zurich
 
 
Posts: 48 since Feb 2011
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Hi myrrdin,

Thanks for your nice thread. I`ve always wanted to trade non index futures, but I haven`t got the slightes idea about them and their fundamentals. What would be the best introduction (from Dummy 2 Master)?

But I still practice some diversification still: Living in Europe I`m a seller of options on Dax, Eurostoxx50, UK Ftse100 and (sometimes) CAC40. Those are European style, so strangles are very margin friendly. Unfortunately US brokers aren`t allowed and IB UK is the very same margin game as been played in the US. Luckily I got Macquarie which provide exchange requirements without mark up.

Kind regards

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  #13 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
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Forex37 View Post
Hi myrrdin,

Thanks for your nice thread. I`ve always wanted to trade non index futures, but I haven`t got the slightes idea about them and their fundamentals. What would be the best introduction (from Dummy 2 Master)?

But I still practice some diversification still: Living in Europe I`m a seller of options on Dax, Eurostoxx50, UK Ftse100 and (sometimes) CAC40. Those are European style, so strangles are very margin friendly. Unfortunately US brokers aren`t allowed and IB UK is the very same margin game as been played in the US. Luckily I got Macquarie which provide exchange requirements without mark up.

Kind regards

Hi,

thank you for your interest in this topic.

I sell commodity options based on fundamentals (see my first entry in this thread for details). Thus, I consider it as essential to collect and understand information on fundamentals. I suggest to start with one group of commodities. If you do not have a special interest, grains and beans seem to me to be the easiest to trade. Meats are complicated, metals are closely correlated with currencies and indices (and, thus, would not be a diversification for you), softs have a lower open interest and are more difficult to trade. You receive basic data for grains from the USDA free of charge. But it is easier to subscribe to some service to get this information well prepared (and interpreted). Hightower is such service, which is distributed free of charge by many US brokers. There is also some information on the site of the exchange (CME). Another option would be to trade the energies (mainly crude oil and natural gas).

I am surprised US brokers are not allowed in your country. Here in Austria they are. I work with RJO and DeCarley, and I am happy with both of them. Most of the large US brokers use minimum margin as requested by the exchanges.

Please do not hesitate to ask further questions.

Best regards, Myrrdin

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  #14 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
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Sold the CLF C60-75. I intend to to extend this position to a strangle at lower prices (if they appear ...).

Also used the move back up of Hog prices to sell the LHZ C70, after I had taken profit on similar calls some days ago.

Best regards, Myrrdin

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  #15 (permalink)
Forex37
Zurich
 
 
Posts: 48 since Feb 2011
Thanks: 64 given, 17 received


myrrdin View Post
usiness

....

I am surprised US brokers are not allowed in your country. Here in Austria they are. I work with RJO and DeCarley, and I am happy with both of them. Most of the large US brokers use minimum margin as requested by the exchanges.
..

Sorry for my poor language proficiency:

Yes, US brokers are allowed in Europe, but:

US brokers are allowed to offer their services to european customers. US brokers are also allowed to offer futures of european exchanges (like Dax of Eurex or FTSE of LIFFE) . US brokers are not allowed to offer options on european futures (like ODAX of Eurex..). So I can`t write options on DAX30 - and an american customers also can`t do this.

Kind regards

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  #16 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
Thanks: 3,029 given, 2,531 received


Forex37 View Post
Sorry for my poor language proficiency:

Yes, US brokers are allowed in Europe, but:

US brokers are allowed to offer their services to european customers. US brokers are also allowed to offer futures of european exchanges (like Dax of Eurex or FTSE of LIFFE) . US brokers are not allowed to offer options on european futures (like ODAX of Eurex..). So I can`t write options on DAX30 - and an american customers also can`t do this.

Kind regards

That is possible - I do not trade European commodities or their options.

Thus, you should choose two brokers - one in Europe and one in the US. I prefer working with two brokers for another reason: third party risk.

US brokers usually provide you with information regarding commodities, which is partially prepared by themselves and partially bought from others.

Best regards, Myrrdin

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  #17 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
Thanks: 3,029 given, 2,531 received

Bought back LCZ P136 at a 62 % loss.

Best regards, Myrrdin

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  #18 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
Thanks: 3,029 given, 2,531 received

Bought back LHZ C70 at +/- 0. I do not understand yesterday's large move upwards - too large for simple short covering (for some time even locked limit up) or liquidation of some LC-LH speads. And in case I do not understand moves of a price, I prefer to quit.

Best regards, Myrrdin

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  #19 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
Thanks: 3,029 given, 2,531 received

Sold ZBZ C160.

Myrrdin

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  #20 (permalink)
 myrrdin 
Market Wizard
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
 
Posts: 1,860 since Nov 2014
Thanks: 3,029 given, 2,531 received


Current positions of my option selling portfolio:

CH P340
CH C500
WH C600
BOH P24
LCZ P130
CLZ C60-75
CLZ P35-25
CLF C60-75
NGZ C4.3
NGZ P2.25
USZ C160

The wheat position is a larger position ("double position") than the others to balance positions moving up vs. down with the US-Dollar. Currently the account is well balanced in this regard.

On my watchlist there is the SIH P14 at current level (in exchange to a profitable long outright position) and a CLF put on a move down. In the meats I am looking to sell calls on a move up.

Best regards, Myrrdin

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