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Diversified Option Selling Portfolio


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Diversified Option Selling Portfolio

  #1561 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
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myrrdin View Post
I revised my plans and entered the short NGU P1.5 / C2.5.

Current weather forecasts do not see severe heat for the next couple of weeks, and I doubt that China will buy a lot of NG in the near future. Thus, a strangle seems to be better suited.

Best regards, Myrrdin

Bought back the NG strangle with a loss of approx. 20 %.

Best regards, Myrrdin

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  #1562 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
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For the European traders:

Trading hours in the US begin 1 hour earlier for 1 week because of the change to Winter Time in Europe. Eg. stock market in New York will open at 2.30 pm Central European Time.

Best regards, Myrrdin

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  #1563 (permalink)
 txsroper 
Austin Tx
 
Experience: Intermediate
Platform: NT, TOS, TradeStation
Trading: ES, NQ, CL, GC, Option Spreads
Posts: 24 since Sep 2013
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I have been trading options for a long time. Have taught many classes to large groups. That said, Hands down the best ( most Knowledgeable and best TEACHER ) is Don Kaufman founder of https://www.theotrade.com/ .

He did a webinar , Free to Members, During the March Sell off on how to hedge your portfolio in less than a few minuets.
I was very impressed and learned some very advanced info. Out right buying an option to hedge over long haul is worst / most expensive.
He taught how step by step how convert your portfolio to an accurate Delta, then choices to accurately Beta Weight HEDGE ANY stock portfolio.

And why NOT to use the DIA.

Excellent Class, Trust me I am a skeptic.

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  #1564 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
Thanks Given: 3,686
Thanks Received: 2,651

Recently volatility was quite high for some commodities, which allowed for entering some OTM short strangles simply based on this fact:

KWK P500/C800
LHJ P60/C80
KCK P1/C2 (after taking approx. 75 % profit for a similar KCH strangle)
SIK P18/C60
NGJ P1.75/C3.4 (small position)

My current strategy is to place an order for profit taking of positions between 50 % and 10 % of the original value, thus, the average profit is 70 % of the original value. This allows for reducing risk rather early.

I hesitated to sell the KW strangle, as C is in a weather market (South Americas), and C can be replaced by KW to a certain degree. But as I hold a significant KW-W position which should work well with rising KW prices, I decided to enter.

The NGJ strangle is a small position. As mentioned earlier in this thread, I do not enter short options for the Z, F, G, and H contracts in Natural Gas. And J is just following H, thus, it is not without risk in case of a cold blast. What helps is that I hold a long position in the NG futures.

Best regards, Myrrdin

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  #1565 (permalink)
 
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 SMCJB 
Houston TX
Legendary Market Wizard
 
Experience: Advanced
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Broker: Advantage Futures
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
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myrrdin View Post
The NGJ strangle is a small position. As mentioned earlier in this thread, I do not enter short options for the Z, F, G, and H contracts in Natural Gas. And J is just following H, thus, it is not without risk in case of a cold blast. What helps is that I hold a long position in the NG futures.

April is a different animal. Even if we do get a winter cold blast, and deplete storage, supply in April is still greater than demand, so it shouldn't spike like the winter can.

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  #1566 (permalink)
mosalem2003
Toronto
 
Posts: 102 since Apr 2019
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He is offering a class now. Are you really sure of this service ? I have been in so many courses and classes and nothing in retail business mentoring is true .. If they are profitable from trading, why they sell courses and waste their trading time in education. Kindly provide @txsroper more info or contact me directly on why I should take it as I have watched his last marketing video and have an interest to register but I am worried it would be like other marketing hypes...so your input is appreciated on why this service could be really differentiated from the crowd!
txsroper View Post
I have been trading options for a long time. Have taught many classes to large groups. That said, Hands down the best ( most Knowledgeable and best TEACHER ) is Don Kaufman founder of https://www.theotrade.com/ .

He did a webinar , Free to Members, During the March Sell off on how to hedge your portfolio in less than a few minuets.
I was very impressed and learned some very advanced info. Out right buying an option to hedge over long haul is worst / most expensive.
He taught how step by step how convert your portfolio to an accurate Delta, then choices to accurately Beta Weight HEDGE ANY stock portfolio.

And why NOT to use the DIA.

Excellent Class, Trust me I am a skeptic.

Sent using the NexusFi mobile app

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  #1567 (permalink)
Sagal
Strasbourg, France
 
Posts: 126 since Mar 2019
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myrrdin View Post
Bought back the NG strangle with a loss of approx. 20 %.

Best regards, Myrrdin

Thanks for the info. I missed the good opportunity for NG: a naked put option at 2.3 expiry February when it was at 2.4 to 2.5.
I keep an eye for a naked put options on Coffee and Cocoa, eventually WTI but that's it. I'm fully focused on PM (silver, platinum or palladium) with CFDs rarely with Futures (for Platinum) as the size of the Silver or Palladium contract is quite big.
No plan for any spreads. As we discussed, Saxo has to change the way the leverage is calculated so that I can reconsider.
All the best for this new trading year Myrrdin!
Sagal

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  #1568 (permalink)
 myrrdin 
Linz Austria
 
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Sagal View Post
Thanks for the info. I missed the good opportunity for NG: a naked put option at 2.3 expiry February when it was at 2.4 to 2.5.
I keep an eye for a naked put options on Coffee and Cocoa, eventually WTI but that's it. I'm fully focused on PM (silver, platinum or palladium) with CFDs rarely with Futures (for Platinum) as the size of the Silver or Palladium contract is quite big.
No plan for any spreads. As we discussed, Saxo has to change the way the leverage is calculated so that I can reconsider.
All the best for this new trading year Myrrdin!
Sagal

Thanks a lot for your good wishes !

I used the high volatility in some commodities to enter wide short strangles in NGJ, SIK, KWK, KCH and KCK, LCJ, LHJ. All of them run smoothly.

I intend to enter a further strangle in NGK this week.

All of these strangles were sold for $400 to $500 per strangle. I intend to buy them back with a profit of 50 % to 75 %.

I wish you a healthy and prosperous New Year !

Best regards, Myrrdin

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  #1569 (permalink)
mosalem2003
Toronto
 
Posts: 102 since Apr 2019
Thanks Given: 106
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Is there a recommendation for a broker who is futures' options friendly given that I will use spread selling not naked?
I have challenges with many brokers who whether can accept Canadian but only support long options or claim they support options selling to figure out when funding the account that they don't have even a platform to sell options spreads.
Unfortunately DeCarley doesn't accept people from Canada yet.
I have an IBKR account and it seems this would be my last resort given they are a huge FCM and that spread selling may not be sensitive for their risk.
I am checking now with other brokers who can clear from Ironbeam but I am not sure about them.
Any recommendation for options selling brokers for Canadian is highly appreciated from the experts who is using this strategy.

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  #1570 (permalink)
 myrrdin 
Linz Austria
 
Experience: Advanced
Platform: TWS
Broker: Interactive Brokers
Trading: Commodities
Posts: 1,938 since Nov 2014
Thanks Given: 3,686
Thanks Received: 2,651



mosalem2003 View Post
Is there a recommendation for a broker who is futures' options friendly given that I will use spread selling not naked?
I have challenges with many brokers who whether can accept Canadian but only support long options or claim they support options selling to figure out when funding the account that they don't have even a platform to sell options spreads.
Unfortunately DeCarley doesn't accept people from Canada yet.
I have an IBKR account and it seems this would be my last resort given they are a huge FCM and that spread selling may not be sensitive for their risk.
I am checking now with other brokers who can clear from Ironbeam but I am not sure about them.
Any recommendation for options selling brokers for Canadian is highly appreciated from the experts who is using this strategy.

I do a lot of option selling with Interactive Brokers.

Regarding margin, they are ok as long as you do not sell naked.

Regarding order entering for spreads, they offer everything I wish.

As an Austrian, I also have the problem that I am not accepted as a customer by many US brokers.

Best regards, Myrrdin

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Last Updated on May 26, 2022


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