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Updated July 28, 2023
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September 2nd, 2014, 09:55 PM
Cleveland, OH
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785
daydayup8
I am not familiar the post style yet, my reply can't even be posted. "
The message you have entered is too short. Please lengthen your message to at least 1 characters."
Edit: IB is a great broker with a lot of good tools, I have been with them since 2008. The only reason I leave is because the margin issue with option selling.
Edit: I have about 10 books about option
greeks and strategies and I read most of them, but they are all for option buying, Cordier's book is the first and only one about option selling. His book is by far the best:-)
I would highly recommend not being with IB for a new option seller.
#1 is the high margin requirements and the market exit margin calls. You don't need that hanging over your head as a new trader.
Do the basic selling techniques for a while before you move to the more advanced stuff. If ever. They are not needed to sell options.
Getting bang for the buck is important to the strategy and needs to be watched. You can't get any bang for the buck at IB.
September 2nd, 2014, 09:57 PM
Cleveland, OH
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785
CafeGrande
I think the Cordier book is pretty good (it also doesn't have a lot of competition). If I recall,
(1) a lot of his examples brought in $300 to $700 per option in credit, so they were probably less than 20% out of the money and more than 20
delta .
This is totally wrong. I had an account with him. He never traded >20 delta. He went further out DTE to have premium and be far OTM .
September 2nd, 2014, 11:32 PM
TPE, TW
Posts: 49 since Jul 2014
Thanks Given: 11
Thanks Received: 47
datahogg
A naked put with a
delta of 0.25 is playing with fire. Also a weekly put with a delta of 0.25 is playing with a nuclear bomb. I monitor Ron99's exit point and also one used probably by
lots of others. If I sell $400.00 of
premium , and my losses reach $800.00 for this posiiton (independent of others), then I close the position. This is very easy to monitor. Wish you the best of luck.
If selling a weekly put with delta of 0.25 is a nuclear bomb then perhaps we should be BUYING those nuclear bombs to make explosive $$$ ? It's all in how the trader plays & manages them, don't put blame on the instruments.
September 3rd, 2014, 12:02 AM
St Paul, MN, USA
Posts: 200 since Jan 2014
Thanks Given: 131
Thanks Received: 207
k20a
If selling a weekly put with
delta of 0.25 is a nuclear bomb then perhaps we should be BUYING those nuclear bombs to make explosive $$$ ? It's
all in how the trader plays & manages them, don't put blame on the instruments.
Right. Under the 'no free lunch' principle, if you had enough money and patience to keep buying those, over a long horizon, you should do as well as the seller.
That's part of Taleb's theory, although he/his former employees do it with well out of the money options. If I recall, he believes way OTM options are systematically under-priced so he expects to come out ahead.
September 3rd, 2014, 05:41 AM
Lancashire UK
Posts: 52 since Jan 2013
Thanks Given: 42
Thanks Received: 32
kevinkdog
FWIW, my ratio is 5.3 over approx 340 trades over the last year. I have no idea if this is good or bad.
I try to follow Ron's advice from here:
ron99
A ratio over 5:1 means your ROI is low. A 2:1 ratio means good ROI.
Mine's about 4.4 since June 2013.
September 3rd, 2014, 09:03 AM
tennessee/USA
Experience: Intermediate
Platform: Quotetracker, TOS
Broker: OX TOS
Trading: ES
Posts: 83 since Aug 2014
Thanks Given: 267
Thanks Received: 8
Plan to sell ES 1580 exp Dec 19, with delta =0.0307. Since I am very familiar with ES, start with ES first.
Any suggestions, Ron? other crew here? IB with IM=$2363, MM=$1890. I will start to use OX today, not sure the margin, I guess it will be much lower. Thanks.
September 3rd, 2014, 09:12 AM
Cleveland, OH
Experience: Advanced
Platform: QST
Broker: QST, DeCarley Trading, Gain
Trading: Options on Futures
Posts: 3,081 since Jul 2011
Thanks Given: 980
Thanks Received: 5,785
daydayup8
Plan to sell ES 1580 exp Dec 19, with
delta =0.0307. Since I am very familiar with ES, start with ES first.
Any suggestions, Ron? other crew here? IB with IM=$2353, MM=$18xx. I will start to use OX today, not sure the margin, I guess it will be much lower. Thanks.
Those are fine. IM is 782.
September 3rd, 2014, 09:13 AM
Posts: 3,668 since Jul 2012
Thanks Given: 1,893
Thanks Received: 7,378
daydayup8
Plan to sell ES 1580 exp Dec 19, with
delta =0.0307. Since I am very familiar with ES, start with ES first.
Any suggestions, Ron? other crew here? IB with IM=$2353, MM=$18xx. I will start to use OX today, not sure the margin, I guess it will be much lower. Thanks.
With OX, margin will be $782. Your ROI, based on 3x margin requirement, will be 1.99%.
I counted 10 other potential options with a higher ROI, and a lower delta. 1560-1630 November expirations, ROI of 2.0% - 2.2%.
September 3rd, 2014, 09:50 AM
tennessee/USA
Experience: Intermediate
Platform: Quotetracker, TOS
Broker: OX TOS
Trading: ES
Posts: 83 since Aug 2014
Thanks Given: 267
Thanks Received: 8
STO 2 @$2.00exp Nov 2014, not filled yet, what is that $1.14 other fees except commission? can that be waived Kevin?
Edit: any potential trading alerts, guys? I want to take a look, thanks :-)
kevinkdog
With OX, margin will be $782. Your ROI, based on 3x margin requirement, will be 1.99%.
I counted 10 other potential options with a higher ROI, and a lower
delta . 1560-1630 November expirations, ROI of 2.0% - 2.2%.
September 3rd, 2014, 10:12 AM
Posts: 3,668 since Jul 2012
Thanks Given: 1,893
Thanks Received: 7,378
daydayup8
STO 2 @$2.00exp Nov 2014, not filled yet, what is that $1.14 other fees except commission? can that be waived Kevin?
Edit: any potential trading alerts, guys? I want to take a look, thanks :-)
I pay $4.07 per side per contract for ES options, commissions, exchange fee and NFA fee.
Last Updated on July 28, 2023