Selling Options on /ES

August 15th, 2015, 04:13 PM

Chubbly

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

August 15th, 2015, 04:20 PM

datahogg

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.

August 15th, 2015, 04:35 PM

Chubbly

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.

August 17th, 2015, 09:45 AM

blb014

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.

August 17th, 2015, 12:58 PM

blb014

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

August 18th, 2015, 03:59 AM

blb014

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?

August 19th, 2015, 01:19 AM

uuu1965

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.

August 19th, 2015, 01:36 AM

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

August 19th, 2015, 02:12 AM

Chubbly

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.

August 19th, 2015, 02:12 AM

blb014

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?

Selling Options on /ES

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Selling Options on /ES