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On 20160209 CL futures were 32.74. If you sold a 42 call and bought two 52 calls here is the result when futures increased to 42. Margin call and 60% draw down when using 6X IM.
Selling a CL call only 10 away from futures is very risky. Ten point moves up in CL in 56 days are fairly common.
What would be a fair % of total profit/loss to spend on commissions and fees? per trade?
General example: If I place a trade for ES puts 10 short(1750) 20 long(1550) I end up paying $84.00 one way. Expensive. Am I looking at this the wrong way?
I have read some of the comments on TOS and I am about to change to one of the recommended brokers.
I fully agree. I was customer of IB, but left them because of their poor service regarding option selling. (Eg. forced liquidation because of severely incorrect calculation by IB).
You should stay with your broker as long as you are satisfied with the service. Commission seems to be ok.
I intend to add KCH P130 or similar to achieve a strangle within the next couple of days. On the one hand, COT data and seasonals show a bearish tendency, on the other hand coffee is in an "off year" in Brazil, and there are relatively small crops in Vietnam, India and Indonesia.
CLG C63-68
I might take profit on a setback. Volatility should rise as the November OPEC meeting gets closer. Ron99 and others: Do you intend to hold your CL calls through the OPEC meeting ?
Holding my CL 40-65 strangle actually at 40% looking to close it at 50% profit. Volatility is too low to sell options actually, will probably sell some strangles once we have some decent vol.
My CL call spread has dropped 35% in premium. I expect to be out this week when prices drop because inventory rising with more imports in this week's report. We'll see if I am right or blowing hot air.