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Selling Options on /ES
Updated: Views / Replies:6,378 / 101
Created: by blb014 Attachments:5

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Selling Options on /ES

  #11 (permalink)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
Thanks: 440 given, 101 received

Current Trades

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.



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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)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
Thanks: 440 given, 101 received


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 Drawdown 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)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
Thanks: 440 given, 101 received

New position


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)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
Thanks: 440 given, 101 received

Update

Update on current positions:

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Closed position:

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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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  #15 (permalink)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 275 since Oct 2012
Thanks: 126 given, 79 received


blb014 View Post
Update on current positions:

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Closed position:

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

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  #16 (permalink)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
Thanks: 440 given, 101 received


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.

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https://futures.io/options-cfd-trading/12309-selling-options-futures-458.html#post506431

https://futures.io/options-cfd-trading/12309-selling-options-futures-458.html#post506440

https://futures.io/options-cfd-trading/12309-selling-options-futures-460.html#post506895

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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  #17 (permalink)
Trading for Fun
Ottawa
 
Futures Experience: Advanced
Platform: Many
Favorite Futures: Options
 
Posts: 87 since May 2015
Thanks: 67 given, 88 received

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)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 275 since Oct 2012
Thanks: 126 given, 79 received


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)
World'sWorstTrader
Knoxville Tennessee USA
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: ES, NQ, CL, /6E futures options.
 
Posts: 275 since Oct 2012
Thanks: 126 given, 79 received

Jade Lizard

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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)
Elite Member
Dallas, Texas
 
Futures Experience: Intermediate
Platform: TOS
Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
Thanks: 440 given, 101 received



datahogg View Post
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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

Last edited by blb014; August 15th, 2015 at 05:37 PM.
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