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I like the principle of waiting for the Close before deciding to exit your position,and I did that when I used to swing trade stocks. I'm just not sure if I'm mentally disciplined enough to be able to sit through the kind of movements that can be expected in Futures Options. And I don't have the historical data to look back at the potential losses that might have happened to make an informed decision.
Would someone with the data be able to check what happend to premiums for, say, a 120/100 strangle for CLN11 on 05/05/11 (when the underlying dropped about nine dollars ) as an example?
Thanks,
Chris
Can you help answer these questions from other members on NexusFi?
Whoa. Doing a strangle that close to ITM like that is asking for big trouble. Never, in a million years, would I do that.
From 5/4/11 to 5/6/11 it went from 2.36 to 6.27. It lost $3,910 in two days. It settled at 5.05. Big loss.
A Jul11 80/140 strangle went from .19 to .61. It lost $420 in two days. It settled at zero. Far OTM you should be able to handle that big futures movement day and end up profitable.
Yup. I'm guessing that the recent price move up can be attributed to the good export news even with the stronger US$. Ron's posted news says nothing but bearish. The little run-up here is on lower volume so I 'see' no reason for a wheat rally here. Right now I'm in crude, silver, and gold. My boat load of gold puts and calls expire on Monday and I like to keep at least a cash:margin ratio of no less than 60:40 so after Monday's GC expiration my trading rules will let me consider wheat.
Here a couple of trades I put on recently on my IB demo account. I was using Apex but I switched to IB because I am used to their platform. For the margin, however, I am using OptionsXpress as I plan to be using them when I start trading live.
3/15/13
SOLD 5 115C M-CL May 16th Expiry for 0.08 Delta: 0.02
IM: 465 MM: 930
3/17/13
SOLD 5 1250P K-ES May 17th Expiry for 1.55
Delta: -0.03
IM: 333 MM: 666
3/19/13
SOLD 5 2000C N-GC June 25th Expiry for 0.9
Delta: 0.03
IM: 492 MM: 984
I want to sell some 70 puts for CL-M to turn it into a strangle but haven't been able to get filled at my premium. Also I am looking to sell the 1000 ZW-N Calls and 200 KC-N Calls. What are your guys' opinion on the trades and potential trades?