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Thanks for the prompt response @myrrdin -- I assumed that their main stream is stocks' options which is a plus to options on Futures. I think the options on futures offer more flexibility than options on stocks in terms of margins, liquidity, and 23hr/day, pricing. Some folks tried to convince me to sell the SPY options or commodity stocks options as USO, UNG but I still prefer the Futures' options - may be I am biased as coming from Futures background - what do you think ?
On another note, it seems the OptionsTrader at TWS is comprehensive tool for our requirements as per your experience?
Can you help answer these questions from other members on NexusFi?
I prefer selling options on futures. When selling options on USO etc, you have to watch closely which contracts they are invested in. The oil market in spring of 2020 showed us how important this matter is.
For me the capabilities of TWS for selling options are absolutely sufficient and better than other tools I know.
Thanks a lot @myrrdin -- This is a good point to take into account regarding the ETF underneath Future contract, and the fact that they invest in Futures is enough to trade directly the Futures market not the ETF market.. Thanks for emphasizing this point..
I am planning to switch from Futures to Options on Futures in terms of Intraday and swing trading to avoid the premature stops and high volatility of the futures and have a lasting power beyond the daily close without margin requirements.
Simply, if I accumulate OTM calls in dips or accumulate OTM Puts at rally. May be adoptions of being only long on ES or MES or only short on ZN or ZB ...
Two things can be done buying the OTM directional long Call or Selling credit bull Put spread. The latter needs and margin and it's limited profit. The former one with an OTM like a price technical target or may be even 0.25 would appreciate to good delta if trade evolves ... The other factor should we trade it on weeklies or monthly to avoid the decay as long as we r trading he direction. The lo Inger maturity might be more expensive but worth as if u have a crash in ES it can recover in a week or two or may be stick to weeklies and just exit with the loss and roll with a higher quantity, etc...
Any feedback from any one who trades options on futures as intraday or swing is highly appreciated...
This trade is a good example for my strategy to hedge one trade against another. I re-entered the KW-W futures spread a short time ago around -40. This spread usually works well when wheat price moves upwards. Now the price of KW looks overbought. Thus, I entered the option spread to hedge a potential setback of the KW-W spread. In case of the option spread will be in danger the KW-W should make great profit - significantly larger than the loss in the option spread.
Volatility of KW is extremely high. Thus, I chose the December contract to be able to take profit for a long time.
I intend to buy back the options in case the futures move beyond 800.
I was just looking at that today. NGn 10 yr seasonal average is to peak May 1st. But that is not really strong. A couple of years are skewing the average.
On Thursday, I rolled the NGN C3.25 / P2.5 to C3.4 / P2.6 to allow for higher temperatures in June. Weather is difficult to predict.
Additionally, I sold the NGQ P2.5 / C3.5 with 89 DTE.
I intend to follow this approach into fall. Exit point will be when a spread has doubled in value. Assuming 8 trades per year (April contract until November contract), and exiting successful trades at 50 %, this concept will be profitable even if two of the trades fail.
When is the difference between selling spreads and outright spreads. Can we take the same trade using NG outright spreads, if yes when to decide to use selling options strangles vs buying outright spreads ?
