CME raising ES margin effective Wed. That makes the increase 61% this month. It's $11,660 for ES futures for non-members.

I have been long ES puts since March 4. Doing well on them. Trying to figure out when to exit.

ron99 

CME raising ES margin effective Wed. That makes the increase 61% this month. It's $11,660 for ES futures for non-members. I have been long ES puts since March 4. Doing well on them. Trying to figure out when to exit.

Great trade!
Do you buy these really OTM ? or ATM ?

ajk1 

Great trade! Do you buy these really OTM ? or ATM ?

On March 2 I bought one EW1j20p2500 for 11.00. Futures were 3065. Exited March 18 at 230.00.

On March 5 I bought five EW3j20p2300 for 17.50. Futures were 3015. Exited March 18 at 170.00.

On March 10 I bought twenty EW3k20p2100 for 24.00. Futures were 2866. Exited March 18 at 140.00.

In March 18 I bought 135 EW3k20p1500 for avg price of 28.59. Futures were 2414.

Rolling to lower strike and acquiring four times as many options for less cost than the options I exited doubled my profit on March 18.

Lower strikes give you a higher percent return than do closer to ATM strikes, if the market moves greatly in your direction.

That's impressive @ron99. Congratz. Assuming I understand you correctly though, you now have a much more significant short @ES/Long Vol trade on. Obviously you don't need prices to go to 1500 to make money on this... a nice 100 point drop tomorrow could double your money.

ron99 

On March 2 I bought one EW1j20p2500 for 11.00. Futures were 3065. Exited March 18 at 230.00. On March 5 I bought five EW3j20p2300 for 17.50. Futures were 3015. Exited March 18 at 170.00. On March 10 I bought twenty EW3k20p2100 for 24.00. Futures were 2866. Exited March 18 at 140.00. In March 18 I bought 135 EW3k20p1500 for avg price of 28.59. Futures were 2414. Rolling to lower strike and acquiring four times as many options for less cost than the options I exited doubled my profit on March 18. Lower strikes give you a higher percent return than do closer to ATM strikes, if the market moves greatly in your direction.

Nice work Ron, hope you are enjoying this great Ohio weather and closed restaurants, stores and bars!

Not sure of the timing of all this, but it looks like you invested $550 in this, and rolled winnings into $194K, took out $1K and are now playing with $193K of winnings (and even if that goes to nothing, you've taken out $1K and worst worst case doubled your stake).

Or did you invest more outside money along the way?

Great job Ron and best of all not subject to margins. Normally this high volatility will eat into the premiums but these are unprecedented times

Profits are
March 2nd option: (230-11)*1*50=$10,950
March 5th option: (170-17.50)*5*50=$38,125
March 10th option: (140-24)*20*50=$116,000
Total profit = $165,075

Maybe i am missing something.. the $194k seems to be the final price on exit but doesnt take into account the cost of the options...
Apologize if i got this wrong.. doesnt still matter
The strategy is great.. where you have compounded your profits by rolling to lower strikes as you kept buying

ron99 

On March 2 I bought one EW1j20p2500 for 11.00. Futures were 3065. Exited March 18 at 230.00. On March 5 I bought five EW3j20p2300 for 17.50. Futures were 3015. Exited March 18 at 170.00. On March 10 I bought twenty EW3k20p2100 for 24.00. Futures were 2866. Exited March 18 at 140.00. In March 18 I bought 135 EW3k20p1500 for avg price of 28.59. Futures were 2414. Rolling to lower strike and acquiring four times as many options for less cost than the options I exited doubled my profit on March 18. Lower strikes give you a higher percent return than do closer to ATM strikes, if the market moves greatly in your direction.

Update.
On March 19 I exited the 1500 puts at 34.50 for gross profit of $39,875. Waiting for time to buy more puts. Thinking Friday near close if ES futures run higher like they have last 3 Fridays. Probably do the 1500s again.

jokertrader's numbers are correct. $165,075 profit before costs on first set of trades. I pay $6.14 RT costs per ES option contract.

These are just for my regular trading account. I am also trading in ROTH IRA accounts for myself and wife. No taxes on those $215,312 gains.

kevinkdog 

Nice work Ron, hope you are enjoying this great Ohio weather and closed restaurants, stores and bars! Not sure of the timing of all this, but it looks like you invested $550 in this, and rolled winnings into $194K, took out $1K and are now playing with $193K of winnings (and even if that goes to nothing, you've taken out $1K and worst worst case doubled your stake). Or did you invest more outside money along the way?

Plenty of restaurants doing carry out or have drive-thru pickup. I love working from home!

$550 was just for 1st option buy. Total cost for first set of buys was $10,925. Net profit was $164,915.36. Or 1,509% return.

Then I spent $192,982.50 before costs to buy the 135 puts. $39,046.10 net profit or 20% return in one day.

Long puts are great if you are correct. They will suck the money out of your account if you are wrong.

ron99 

On March 2 I bought one EW1j20p2500 for 11.00. Futures were 3065. Exited March 18 at 230.00. On March 5 I bought five EW3j20p2300 for 17.50. Futures were 3015. Exited March 18 at 170.00. On March 10 I bought twenty EW3k20p2100 for 24.00. Futures were 2866. Exited March 18 at 140.00. In March 18 I bought 135 EW3k20p1500 for avg price of 28.59. Futures were 2414. Rolling to lower strike and acquiring four times as many options for less cost than the options I exited doubled my profit on March 18. Lower strikes give you a higher percent return than do closer to ATM strikes, if the market moves greatly in your direction.

To show how rolling lower helped my profits.

If I kept my original 26 long ES puts they would be as of March 19 settlements +$153,775 (gross).

By exiting those puts and rolling to lower puts my net now is $165,075+$39,875=$204,950.

But that isn't quite a fair comparison because I spent more on 1500 puts than what I sold the original set for. If I had only spent on the 1500s what I profited on the original set I would have bought 115 1500 puts. Using same prices those 115 would have profited $33,982.50.

So $165,075+$33,982.50=$199,057.50.

$199,057.50 gross profit with rolling to lower strike vs $153,775 profit if I kept original set of options.

jokertrader 

The strategy is great.. where you have compounded your profits by rolling to lower strikes as you kept buying

While it appears he did do that in reality he didn't. If you check the trade dates the first 3 positions while opened on different days were actually all open at the same time.

ron99 

Then I spent $192,982.50 before costs to buy the 135 puts. $39,046.10 net profit or 20% return in one day.

And if you hadn't sold them yesterday you'd be down 40% on them today! All a matter of timing. With so many trades the timing is as important as the actual idea! Congratz to you Sir!