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Selling Options on /ES
Updated: Views / Replies:6,362 / 101
Created: by blb014 Attachments:5

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Selling Options on /ES

  #21 (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
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

I have never traded commodities, there are seasonalities, reports and just myriad of other factors that I am not that knowledgeable about. Just /ES options on the futures side.

As far as diversifying, It really depends on what commodity you are familiar with. I started out trading equities, indices and options so that's what I am familiar with (/ES). I personally think that /ES is good starting point and if you want to try some other commodities start small and see how it goes.

Overall diversification. I have a total stock market international etf and bond and treasury fund. My allocation is more US equities 80%, 10% bonds and 5%international 5% treasury. I also have about 7 equities that I have positions in, either stock or options

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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  #22 (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
One of the advantages of trading ES is the usually large open interest. You can get in and out of positions easily.

This is true. What I do see though if someone is leveraging 150 million + every month and controlling a high percentage of the OI that could be a max pain situation if market takes a steep turn.

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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  #23 (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
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


I'm glad your not following the herd, not being naive and thinking objectively about your positions.

I see risk being equated to strike price not how much someone is leveraging or the high possibility of a major drawdown.

Clues that everyone should pay attention to decipher someone's true motive:

When question about the high probability of a major drawdown the response was, "what does it matter you should trading with money that you can lose"

How much someone is leveraging is never mentioned and pushing trading as many contracts (commissions) as possible.

The past two years volatility was been low, the results from the previous 6 years would be much different.

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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  #24 (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
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.

I agree, but with rumors and more rumors of a developing bear market, this type position might survive.

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


blb014 View Post
I'm glad your not following the herd, not being naive and thinking objectively about your positions.

I see risk being equated to strike price not how much someone is leveraging or the high possibility of a major drawdown.

Clues that everyone should pay attention to decipher someone's true motive:

When question about the high probability of a major drawdown the response was, "what does it matter you should trading with money that you can lose"

How much someone is leveraging is never mentioned and pushing trading as many contracts (commissions) as possible.

The past two years volatility was been low, the results from the previous 6 years would be much different.

Yes, I am concerned with being concentrated on one position. I am trying to ensure there is low correlation between trades. I traded /CL the past 2 months and have learned a lot and managed to even come out of that massive drop with a small profit.

The problem I am finding is there are not many underlyings with high liquidity. Basically only /ES /CL /6E and /ZN

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  #26 (permalink)
Trading for Fun
Riga Latvia
 
Futures Experience: Intermediate
Platform: Zaner 360
Favorite Futures: commodyties
 
Posts: 101 since Jan 2013
Thanks: 370 given, 70 received


blb014 View Post
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

Does it mean that for -10 Oct 1915 Put contracts you have 957 500 margin?

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  #27 (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


uuu1965 View Post
Does it mean that for -10 Oct 1915 Put contracts you have 957 500 margin?

That is the value of the /ES put contracts that were sold ((1915*50)*10). I make note of that value on option trades to get idea of how much I am leveraging at a given time. The margin required was $23,618.

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
Reply With Quote
 
  #28 (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 on Positions

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Sold 1900 @ $12.00 and will be looking to close ~$7
Sold 1915 @ $15.50 and will be looking to close ~$8

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
Reply With Quote
 
  #29 (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
Yes, I am concerned with being concentrated on one position. I am trying to ensure there is low correlation between trades. I traded /CL the past 2 months and have learned a lot and managed to even come out of that massive drop with a small profit.

The problem I am finding is there are not many underlyings with high liquidity. Basically only /ES /CL /6E and /ZN

For low correlation I would take a look at bonds. I am sure there are some nuances to consider with bond options also.

Well done with /CL trades.

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
Reply With Quote
 
  #30 (permalink)
Trading for Fun
Riga Latvia
 
Futures Experience: Intermediate
Platform: Zaner 360
Favorite Futures: commodyties
 
Posts: 101 since Jan 2013
Thanks: 370 given, 70 received



blb014 View Post
That is the value of the /ES put contracts that were sold ((1915*50)*10). I make note of that value on option trades to get idea of how much I am leveraging at a given time. The margin required was $23,618.

And how much you left for margin and option price increseanig?

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