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Hi Myrrdin, I imagine this trade is a pure volatility play and time decay is not the main aim here. What tool do you use to watch the options volatilities? I have TWS from IB and although they have the Volatility Lab, I'm not quite sold on it yet.
No, I do not use standardized strategies. I am a discretionary trader, investigating each trade separately.
Diversification is extremely important for me. This is true not only for diversification of various commodities, but also for diversification of strategies for the trades.
In this case, it was obvious that the large move down of the Crude price would offer excellent possibilities for selling very far OTM options. To benefit from this extreme situation for a long time, I decided to sell the December 19 options.
I intend to hold the position down to 25 % or 50 %.
Tonight prices were even higher. Probably there will be a good possibility again tomorrow.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
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If I interpret this CME Performance Bond Requirement (aka margin) changes correctly it is saying that they are increasing the volatility scan ranges for most oil options effective after the close of business on November 15, 2018. ie Margin requirements for most Options will go up.
