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Selling Options on /ES


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Selling Options on /ES

  #11 (permalink)
 blb014 
Dallas, Texas
 
Experience: Intermediate
Platform: TOS
Trading: AAPL, /ES, IWM, SPY Options
Posts: 330 since Oct 2012
Thanks Given: 554
Thanks Received: 187

These are the two /ES option trades positions I currently have on. Hopefully I will be closing these positions this week.

I wanted to make note that everyone should be cognizant of the total leveraged amount of their /ES option positions. Less is definitely more with futures and using SPAN margin is a big responsibility. A volatility spike could have disastrous consequences for someone that is over-leveraged no matter how far out of the money their puts are. Just be aware of this and I say this from an unbiased perspective not promoting commissions or a broker.




Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
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  #12 (permalink)
 blb014 
Dallas, Texas
 
Experience: Intermediate
Platform: TOS
Trading: AAPL, /ES, IWM, SPY Options
Posts: 330 since Oct 2012
Thanks Given: 554
Thanks Received: 187


Chubbly View Post
I am also a believer in using a 1/2 to a 1/4 Kelly Criterion

A Kelly Strategy Calculator

As well as keeping my Risk of Ruin/Drawdown to an acceptable level. i took a big loss early in my trading career and have been scared by it ever since. So I am risk averse.

Risk of Ruin and [AUTOLINK]Drawdown[/AUTOLINK] Calculation Tool | Au.Tra.Sy blog - Automated trading System

Good stuff Chubbly.

I have definitely taken my share of lumps too. But those losses made me realize how important it is to trade appropriate sized positions for my account especially for highly leveraged /ES options using SPAN margin.

Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
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  #13 (permalink)
 blb014 
Dallas, Texas
 
Experience: Intermediate
Platform: TOS
Trading: AAPL, /ES, IWM, SPY Options
Posts: 330 since Oct 2012
Thanks Given: 554
Thanks Received: 187


Sold to open:

-10 Oct 1915 put leveraging 957,500

I feel good about these positions (currently). I think the market is oversold, like the Greek situation last month when I double down and had my best returns of the year.

I could be wrong though so I am prepared to roll down with plenty of excess margin

Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
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  #14 (permalink)
 blb014 
Dallas, Texas
 
Experience: Intermediate
Platform: TOS
Trading: AAPL, /ES, IWM, SPY Options
Posts: 330 since Oct 2012
Thanks Given: 554
Thanks Received: 187

Update on current positions:





Closed position:


Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
Started this thread Reply With Quote
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  #15 (permalink)
 datahogg 
Knoxville Tennessee USA
 
Experience: Intermediate
Platform: TOS
Trading: ES, NQ, CL, /6E futures options.
Posts: 346 since Oct 2012
Thanks Given: 135
Thanks Received: 154


blb014 View Post
Update on current positions:





Closed position:


Please pardon my density, but how did you get such a good opening price?

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  #16 (permalink)
 blb014 
Dallas, Texas
 
Experience: Intermediate
Platform: TOS
Trading: AAPL, /ES, IWM, SPY Options
Posts: 330 since Oct 2012
Thanks Given: 554
Thanks Received: 187


datahogg View Post
Please pardon my density, but how did you get such a good opening price?

/ES was down significantly that day and VIX was >14.5. That following Monday, the position traded higher and I was down -2,000 at one point.










Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
Started this thread Reply With Quote
  #17 (permalink)
Chubbly
Ottawa
 
Posts: 87 since May 2015
Thanks Given: 67
Thanks Received: 88

Are you trading only ES ? Or are you trading a variety of futures? I am still trying to decide if I need to be diverse or can I I get by trading only ES

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  #18 (permalink)
 datahogg 
Knoxville Tennessee USA
 
Experience: Intermediate
Platform: TOS
Trading: ES, NQ, CL, /6E futures options.
Posts: 346 since Oct 2012
Thanks Given: 135
Thanks Received: 154


Chubbly View Post
Are you trading only ES ? Or are you trading a variety of futures? I am still trying to decide if I need to be diverse or can I I get by trading only ES


One of the advantages of trading ES is the usually large open interest. You can get in and out of positions easily.

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  #19 (permalink)
 datahogg 
Knoxville Tennessee USA
 
Experience: Intermediate
Platform: TOS
Trading: ES, NQ, CL, /6E futures options.
Posts: 346 since Oct 2012
Thanks Given: 135
Thanks Received: 154




This a small (actual money) Jade Lizard for the NQ futures options. (A close cousin to the ES.)
Notice the very small Gamma. The margin requirement and profit area are reasonably good.
This position could probably weather a 10% drop in NQ. Any comments good or bad?

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  #20 (permalink)
 blb014 
Dallas, Texas
 
Experience: Intermediate
Platform: TOS
Trading: AAPL, /ES, IWM, SPY Options
Posts: 330 since Oct 2012
Thanks Given: 554
Thanks Received: 187



datahogg View Post



This a small (actual money) Jade Lizard for the NQ futures options. (A close cousin to the ES.)
Notice the very small Gamma. The margin requirement and profit area are reasonably good.
This position could probably weather a 10% drop in NQ. Any comments good or bad?

Jade Lizard, I like the name. Definitely could weather a drop and could be profitable in the range bound market we have been and more profit to the bear side.

For me personally, these nondirectional type option trades sound good in theory but have never really been that profitable for me. The market usually doesn't cooperate and I end having to make adjustments to the trade. For me my bias long-term has been toward the long side and the interest rate change, greece, china hasn't really change my mind because market fundamentals are still strong IMO.

Volatility is good for the market and trading.

Preservation of capital is the most important concept for those who want to stay in the trading game for the long haul. - Van Tharp
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Last Updated on June 7, 2017


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