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Ron and myself checked a lot of other commodities. But we did not find even one that allows for being short options (calls or puts) more or less permanently.
I sell a lot of options, but I consider all other trades with the exception of selling ES puts being directional trades. I have to have an opinion on the next large move of the price of the underlying.
As you can see in the table, the drawdown on the naked option was double vs buying 2 longs. I like this protection in case the is even larger huge crash.
Also with the 2 longs you have a Black Swan trade on too. If there is a huge crash this strategy actually makes a profit.
In this example on 20150824 the spread is profitable $145 before fees while a naked 1740 is -$2,635.
Here is a table from 2015 showing that you can be 2 STD away from futures on ES puts and have decent premium but not really for the others.
If you sold a CLq option for $100 now the call would be 63.50, the put would be 37.50. CL has moved up by more than 14 or down by more than 12 a lot of times.
ESn 1840 put is $100 now. ES has moved 539 down only in 2008 (551). Never since.
Does this mean you only sell puts now? Previously I read in this thread something about you buy 2 puts for each put you short - is that no longer necessary?
And aren't the risks on the trade far greater than the profits?
So, a new position on the sim acct now:
short one ES July EOM put, strike 2025. Entry 5.00
and, to manage risk:
long two ES July EOM puts, strike 1790. Entry 1.8
According to that pdf on the CME site linked to earlier in the thread, the short position is delta 5, while the long position is delta 1.5
Ron99, I want to ask you,do you sell to close 2 puts to realise some profit ,additonal to buy back lower cot 1 put ?And why not to sell pread with with some 40-50 points diffs,which will tight less capital ?