ron99 

I second this opinion.

Never heard of DeCarley, is this an FCM?

Not able to see DeCarley in CFTC FCM financial data.

thejourney 

Never heard of DeCarley, is this an FCM? Not able to see DeCarley in CFTC FCM financial data.

She is a broker. She trades at several FCMs but I use Gain Capital there.

https://decarleytrading.com/

ron99 

She is a broker. She trades at several FCMs but I use Gain Capital there.

So Gain Capital supports naked options?

What is the benefit of using DeCarley vs. going to Gain Capital directly?

On a tangent, looks like Gain Capital has API support, does this API work with buying / selling futures options if you happen to know?

Hi This thread was brought to my attention and I would love to answer your questions. You can also reach me directly at [email protected].

I am an independent introducing broker (technically, DeCarley Trading is a branch of Zaner Financial Services), which means we can choose between various FCMs to clear our clients' business (trades). However, we put the majority of our accounts at Gain Futures. This is because I have built a good working rapport with the risk managers and trade desk over several years which enables my clients to employ option selling strategies. We offer SPAN minimum margin and don't interfere with our client's trades/strategies unless they are in danger of losing more than they have on deposit or are disregarding margin policy (or rationality). In short, we welcome option sellers and are equipped to assist them should something go wrong (help adjusting positions to manage margin and risk, buy some time to get a wire into the account, etc.).

The advantages of trading with us (DeCarley) vs. directly with Gain are plentiful. I've been in the business since 2004 and can get things done, problems solved, and negotiate for better circumstances for my clients. We also offer newsletters with option trading ideas (even if you don't participate, they might give you some ideas on what to do, or not to do). Lastly, because we offer an extra layer of risk management (and risk buffer for Gain), as well as our vast experience in handling option selling accounts, our clients are generally given more leeway to conduct their strategy (in a responsible manner).

You will find more information on our ability to service option selling accounts here: https://decarleytrading.com/commodity-brokerage-services/trade-futures/sell-commodity-options-with-decarley

Carley Garner

thejourney 

So Gain Capital supports naked options? What is the benefit of using DeCarley vs. going to Gain Capital directly? On a tangent, looks like Gain Capital has API support, does this API work with buying / selling futures options if you happen to know?

Carley is always ready to discuss your trading strategies.

And in case of problems with Gain Capital (eg. regarding trading tool or reporting), she takes care in a very helpful manner.

As a long-term trader, trading fees do not have the same relevance for me as for day traders. Thus, I appreciated her services.

Best regards, Myrrdin

ron99 

I guess I am on a deserted island. Anybody know a place that discusses selling options on futures?

I'd be interested in a group that discusses some of the more advanced problems encountered when selling futures options. I've been doing that for about a year now with WTI /CL options, because the monthly trading time frame fits my busy schedule best (I actually have a very time-consuming day job as a biotech vaccine developer). I managed to draw down my account about 50% during the steep learning phase, but have now had 5 months of consistent gains and am back to par, so I've added capital to expand the effort.

I've been using the rules that Allen Same developed in a course he calls Blank Check Trade that uses a 10% monthly gain as a target. He's a good teacher and we have a lively group discussion every week that I really look forward to, but I've started to feel like I need a more experienced group to discuss issues at an intermediate level, so I'm turning to this forum to generate interest.

My current interest is in learning how to make adjustments when the market moves against my initial trades. While I usually open single naked options at a ∆ around 10-12 at 30-40 days from expiration, I try to quickly turn them into strangles to profit on both sides. These do fine until there's a strong shift in the price of oil, the volatility goes up, and my margin is challenged. I was simply stopping out when the ∆ goes above 20 (Allen's general rule), but found that was the source of most of my losses. I thought that I could hang on instead, but found that the price goes up faster as the ∆ goes higher (of course) and have ended up stopping out at around a ∆ of 40 (ouch!).

To fix this, I have started to close my positions if the ∆ is rapidly rising above 20, then reopen with positions that are slightly further from the money when the market finally reverses. Most of the loss is recovered and I can continue to wait for the theta decay. Any comments on whether that's the best solution? Is there a forum here that I should join? I have looked at several of Carley Garner's books for clues - any suggestions for more research?

MDRider 

I'd be interested in a group that discusses some of the more advanced problems encountered when selling futures options. I've been doing that for about a year now with WTI /CL options, because the monthly trading time frame fits my busy schedule best (I actually have a very time-consuming day job as a biotech vaccine developer). I managed to draw down my account about 50% during the steep learning phase, but have now had 5 months of consistent gains and am back to par, so I've added capital to expand the effort. I've been using the rules that Allen Same developed in a course he calls Blank Check Trade that uses a 10% monthly gain as a target. He's a good teacher and we have a lively group discussion every week that I really look forward to, but I've started to feel like I need a more experienced group to discuss issues at an intermediate level, so I'm turning to this forum to generate interest. My current interest is in learning how to make adjustments when the market moves against my initial trades. While I usually open single naked options at a ∆ around 10-12 at 30-40 days from expiration, I try to quickly turn them into strangles to profit on both sides. These do fine until there's a strong shift in the price of oil, the volatility goes up, and my margin is challenged. I was simply stopping out when the ∆ goes above 20 (Allen's general rule), but found that was the source of most of my losses. I thought that I could hang on instead, but found that the price goes up faster as the ∆ goes higher (of course) and have ended up stopping out at around a ∆ of 40 (ouch!). To fix this, I have started to close my positions if the ∆ is rapidly rising above 20, then reopen with positions that are slightly further from the money when the market finally reverses. Most of the loss is recovered and I can continue to wait for the theta decay. Any comments on whether that's the best solution? Is there a forum here that I should join? I have looked at several of Carley Garner's books for clues - any suggestions for more research?

I follow a lot of different strategies in futures and options trading for 15 - 20 years, depending on the situation. When selling strangles I usually proceed as follows:

I only sell strangles at high implicit volatility, and I always sell both legs at the same time. Usually I sell approx. 100 DTE. I sell strangles on (almost) all commodities, avoiding weather markets. Weather markets usually go with extremely high volatility, but in my opinion are not worth the high risk.

I exit in case the strangle has doubled in value. The exact point of liquidation is determined in the chart of the underlying (support, resistance). When liquidating, I buy back both legs at the same time. I do not repair, but I might enter a new strangle. This new strangle has to fulfil the same conditions as the original strangle.

I hope this helps. Please do not hesitate to ask further questions.

You will find more information about my option selling in the thread "Diversified Option Selling Portfolio".

Best regards, Myrrdin

myrrdin 

I sell strangles on (almost) all commodities, avoiding weather markets. Weather markets usually go with extremely high volatility, but in my opinion are not worth the high risk.

Weather markets are wheat, corn, soybeans? Anything else there? Cotton?

josh 

Weather markets are wheat, corn, soybeans? Anything else there? Cotton?

NatGas! I'd guess OJ, Coffee, Coccoa as well.

josh 

Weather markets are wheat, corn, soybeans? Anything else there? Cotton?

When I talk about weather markets, I mean a certain time of the year when future prices for a certain commodity are strongly influenced by the weather and show large price movements.

Examples: Corn in July (pollination), Soybeans in August (blooming), Coffee in September (flowering), Natural Gas from December until March.

I do not sell options during these months, although it ts tempting.

Best regards, Myrrdin