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Selling Options on /ES
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Created: by blb014 Attachments:5

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Selling Options on /ES

  #1 (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

Selling Options on /ES

I am starting a thread to give updates on my /ES option trades. I respect Ron ideas and strategy, like I have stated many times on his thread. He has elected to put me on ignore. I wish Ron nothing but the best


On this thread I will post my /ES option trades and will up date it periodically. All are welcome to post/ critique. I welcome different views and analysis. And I will not put someone on ignore if they have a different opinion. I believe that different view points can only make someone a better trader. I am not promoting a broker or commissions.

I use substantial less margin than IM*3. My trades will be substantially less quantity and amount leveraged. I usually don't sell longer dated options >90 days because of the substantial amount of Vega risk.

I will sell puts from Delta -.10 to -.20 and 80 days to 50 days expiration. I will also look to sell during higher volatility periods or spikes, which usually coincide with a down day or correction. I will update my trades later this week. All are welcome to post, submit analysis or critique. No one will be ignore unless someone resorts to personal attacks.

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 20th, 2015 at 06:11 PM.
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  #2 (permalink)
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  #3 (permalink)
Trading for Fun
Ottawa
 
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Just curious if you ever do Calls on /ES or is only Puts?

I have been trading both the past few months with success but I think it may be because of the current market I have gotten away with it

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  #4 (permalink)
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Futures Experience: Intermediate
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Favorite Futures: AAPL, /ES, IWM, SPY Options
 
Posts: 208 since Oct 2012
Thanks: 440 given, 101 received


Chubbly View Post
Just curious if you ever do Calls on /ES or is only Puts?

I have been trading both the past few months with success but I think it may be because of the current market I have gotten away with it

That's good to hear, what delta and strikes do you normally sell?

I have not sold calls on /ES. I have sold calls on SPY and SPX with some success but I found that the premium is not there on SPY and SPX on the call side to justify opening a position. Just looking at /ES right, I am not able to find a strike that I would feel comfortable selling and get a decent premium:

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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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  #5 (permalink)
Market Wizard
Houston, TX
 
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blb014 View Post
I am starting a thread to give updates on my /ES option trades. I respect Ron ideas and strategy, like I have stated many times on his thread. He has elected to put me on ignore. I wish Ron nothing but the best

This was the private message to him

Hey Ron...


This is how he responded:

You...

Unless you have @ron99's permission I don't think it's nice to publicly post a private conversation.

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

I am trading around the 10 delta but I have been skewing things. I have been doing ratios (3:2) as well as trying credit spreads with a similar ratio for the distance of the strikes. So something like a $60 spread for putts and $40 for calls

Mostly because I am still relatively new to Options so doing both puts and calls

I had a SPX 2190/2210 and 1910/1890 which I closed for $1.30 after 8 days with a big part being the call side, but may have been lucky


Last edited by Chubbly; August 3rd, 2015 at 04:18 PM.
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  #7 (permalink)
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SMCJB View Post
Unless you have @ron99's permission I don't think it's nice to publicly post a private conversation.

Message deleted. But I was not allowed an opportunity by Ron to respond to his allegations that was "making up stuff" and outright lying. He put me ignore after he made that statement about losing all credibility. So I believe I have right to at least respond. I try to clear the air with by sending him a PM and not responding anymore to his allegations. But the way he handle it by making those allegations and then putting me on ignore and not allowing me to respond was just uncalled for 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 3rd, 2015 at 04:16 PM.
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  #8 (permalink)
Trading for Fun
Ottawa
 
Futures Experience: Advanced
Platform: Many
Favorite Futures: Options
 
Posts: 87 since May 2015
Thanks: 67 given, 88 received

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


Last edited by Chubbly; August 3rd, 2015 at 04:54 PM.
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  #9 (permalink)
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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 trading around the 10 delta but I have been skewing things. I have been doing ratios (3:2) as well as trying credit spreads with a similar ratio for the distance of the strikes. So something like a $60 spread for putts and $40 for calls

Mostly because I am still relatively new to Options so doing both puts and calls

I had a SPX 2190/2210 and 1910/1890 which I closed for $1.30 after 8 days with a big part being the call side, but may have been lucky

Nice trade. In this range bound market that we have been for basically for the better part of 2015, call and put spreads can work for someone that is more actively engaged in the market.

I traded some iron condors on SPX four years ago and with some success but when the market move strong on the call side it basically wiped out of the put side gains and then some. For someone that is actively following the market during the day and can make adjustments, there is definitely potential in those type trades that "strangle the market"

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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  #10 (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 trading around the 10 delta but I have been skewing things. I have been doing ratios (3:2) as well as trying credit spreads with a similar ratio for the distance of the strikes. So something like a $60 spread for putts and $40 for calls

Mostly because I am still relatively new to Options so doing both puts and calls

I had a SPX 2190/2210 and 1910/1890 which I closed for $1.30 after 8 days with a big part being the call side, but may have been lucky


Really nice trade especially in this range bound market will have been in.

I will say that I have tried many different option strategies over the years including ratio spreads. I learn a pccrc (put call calendar ratio combination) method at a traders expo one year, a delta neutral strategy that profited from the increase volatility of equities before earnings. It worked great during periods of higher volatility with volatile stocks but required adjustments. At least for me, what I found was the put options that I was selling on iwm,spx, spy were consistently making a higher return with considerably less commissions and requiring less adjustments. So that's where I have been at for the last few years, it is boring and simple but that works better for me.

But I definitely think someone that is monitoring the market more than me can juice their returns on both the call and put side

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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