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I use only 33% of my balance for margin. I used to use 50% but ended up getting bounced out of trades that ended up being winners far too often.
Like mu2pilot said, Sometimes (most times?) he rolls, sometimes he closes the position, sometimes, if he is close to expiration and he feels confident in the trade, he stays put.
I agree that Karen numbers would have her out of the position before it got to 0.3 delta.
Can you help answer these questions from other members on NexusFi?
Actually that is Liberty Trading's rule. Since I sell so far OTM and for low premium I would be exiting all of the time. For example, if I sold the option for $40 and exited when it doubled I would get out at $80. But there is no reason to exit when it only goes up $40.
I figured you used Dudetooth's spreadsheet to figure SPAN. I have his spreadsheets and was going to use some of his code for part of my program.
But I was wondering if you manually pulled up option chains for each of your markets and plugged them in to Dudetooth's spreadsheet or if you created a "trade finder" of sorts to scan through each market for all options that meet your criteria.
For each instrument, I basically calculate the ROI for each option. Then, I filter the results for delta, ROI, and a minimum amount of premium. I run over 3,000 individual options a day, and it takes an hour or two. But, it does let me look at a variety of ROIs.
So I basically run a complete sweep, then filter on what I am interested in. I could make it a lot better by just skipping options where I know the delta will be too high. That would greatly reduce the time it took to run. Maybe I'll eventually do that...
Trading: short fut. opt., fut. spreads, div. stocks
Posts: 57 since Feb 2012
Thanks Given: 3
Thanks Received: 27
thanks guys,
i'm looking at a coffee strangle, what do you think?
the put would be triggy, the call seems ok.
anybody know the fundamentals on coffee, would we have made a bottom yet? if i look at the continues data coffee hasn't been this low for mannnnny years but againd that doesn't say it can't go lower ;-)
I like to put (green) lines in my charts from opening the position (down for put, or up for call) to the exp. date.
so the fut should stay above the shorted put line or below the shorted call line as we move foward. (I let it cross in the first few weeks)
Than copy the line (create parallel and place it at bad locations in the past, as you can see the put has a fair change of be a looser, the call not so much). And yes i know time decay is not linear.
just saw at the page before ron mentioned the march call 135
perhaps sell the call & wait for a downswing to sell the put.
although i still think the put is a risky trade, this is interesting.
does anybody know at what price farmers start burning their stock out of frustration? (the minimum production costs?)
A part of it in italic... Coffee open interest has been falling lately
and commercials are holding a rather long
position. What is important to note about
this is that the increase in the commercial
net position is not from shorts increasing
their holdings, but rather longs increasing
the size of their coverage. This would imply
less worry about prices falling going forward
and more risk of prices going higher. Given
how far the market has fallen already it
makes sense fundamentally, even though
there are no strong indicators yet the
market has reached bottom.
Interested in your thoughts,
regards.
@Ron99, you mentioned you like at least 2%/month, is that based on the maint. margin for the contract or do you take the 33% or 66% 'spare money' in account?
lets take this above coffee call as a sample premium is 0.28 * 375 = $105, days 55, MM (ib) = $731
so it makes %105/ $731 in 55 days = 14.9% in 55days, which is 14.9% * (31 / 55d ) = 8.39%/month
but that 8.39% is based on the MM at opening, you use only 33% of your money (i still use 50%)
so taking that in account you have $731 * 3 = $2193 sitting in the bank (for margin safety) to make $105 (in the 55days)
that gives this trade 8.39 / 3 = 2.799% /month, (or 33.5%/year) which is still nice.
Trading: short fut. opt., fut. spreads, div. stocks
Posts: 57 since Feb 2012
Thanks Given: 3
Thanks Received: 27
Hi,
here is another interesting one (also mentioned by kevin), more dangerous but well we get paid for fear...
in case you consider this trade, you may want to read the conversation on this thread (first page) since the NG march-april can be a very rough ride.
I'm looking for spread traders to share ideas with.
i have been trading futures and future optinos for many years and am now looking into (future) spread trading.
i can find only a few threads about spreads so hopefully there are some people …
Short NGh14 call 6.0 or 6.5 (i guess the 6.5 is the better/safer candidate),
Looking forward to your replies.
oh, i guess you could consider a spread for this one, either C6-C6.5 or C6-C7, etc
I second that, I don't post here much as I subscribe to the theory is you don't have much to add why add something of no value.
However, The above comment is really important, if you have a trade that goes against you or not as planned, skimming through the pages of this thread will either make you see something you personally overlooked, or glean some insight from a number of traders who have been doing this for a number of years.
I personally think this might one of the best threads on this forum, and this is probably the best forum on the interwebs for trading!
I've been trading for 15 years and selling options for 8. I would state that when you start out at this game, take is slow and keep your size manageable. 2 or 3 contracts going not as planned is a lot easier to manage than 5 or 10 or more.
Thanks to all the contributors of this thread and forum!
Friday's close IV for /ES futures was 10.12 (or 8% of the 52 week high).
Friday's close IV for /CL futures was 13.53 ( or 0% of the 52 week high).
Friday's close IV for /NQ futures was 11.77 ( or 8% of the 52 week high).
Presently does not look like a time to sell premium.