Writing futures options uncovered...

This is a discussion on Writing futures options uncovered... within the Futures & Options forums, part of the Markets category; Erm, I am not really sure what this discussion is about... No strategy is ever all good or all bad. ...

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Old Aug 17, 2012, 11:22am   #11
 
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Re: Writing futures options uncovered...

Erm, I am not really sure what this discussion is about...

No strategy is ever all good or all bad. The devil is, always and everywhere, in the details and the specifics.
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Old Aug 17, 2012, 5:05pm   #12
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Re: Writing futures options uncovered...

If your strategy is to just short options without every worrying about the vol market or your short gamma position you will blow up.

You are constantly short tail risks. If you're not looking at skew, roll down and absolute vol level how can you be sure that the trade is good?

For example selling vol at these very low August levels is not a trade i would take regardless of what the chart technicals are telling you, it just not good value here.
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Old Aug 17, 2012, 10:34pm   #13
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Re: Writing futures options uncovered...

optsonly started this thread
Quote:
Originally Posted by MacroStyle View Post
If your strategy is to just short options without every worrying about the vol market or your short gamma position you will blow up.

You are constantly short tail risks. If you're not looking at skew, roll down and absolute vol level how can you be sure that the trade is good?

For example selling vol at these very low August levels is not a trade i would take regardless of what the chart technicals are telling you, it just not good value here.
Not sure what August markets you are referring to...
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Old Aug 17, 2012, 10:41pm   #14
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Re: Writing futures options uncovered...

optsonly started this thread Sounds like the experts have been here the entire time, and spoken. Depending on what you look for to enter a trade and if you want to filter for the best possible greek variable scenario then your 'choices' for potential sells will be very limited. The method here is simply writing far OTM options with x number of days left to expiration and look for time decay to eat away the premium. X number of days being two or three months of time.

If you want to sell a CZ 700 call option uncovered right now because that is what your greeks are telling you what you should do then knock yourself out. That in my mind is crazy, ridiculous, stupid, and you have no idea what you are talking about. If you have nothing to add to the thread besides criticism then please move on. I don't care if you have over 3,000 posts or 3 posts. Everyone's method is different for whatever reason. I have done this for years. I'm not here to start a pissing contest which sounds like everyone else has already but if that is what you want then fire away. The week is over.
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Old Aug 18, 2012, 11:23pm   #15
 
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Re: Writing futures options uncovered...

Quote:
Originally Posted by optsonly View Post
If you want to sell a CZ 700 call option uncovered right now because that is what your greeks are telling you what you should do then knock yourself out.
Hi,

I have a question about greeks I'd like to ask here so that I don't have to start a new thread. Once I know the spot price, option price, style, riskfree rate, date at moment of writing and maturity date I can obtain IV and then, delta etc...by running the formula up-side-down, correct?

Now, suppose I want to calculate greeks (delta mostly) for long-term option, say DEC12, does it make sense to use the current spot price in the formula, or should I use the DEC12 futures settlement price?

I am concerned on this because the delta will indeed change If I either use spot price or the future price sharing the same maturity date
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Old Aug 19, 2012, 1:40am   #16
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Re: Writing futures options uncovered...

optsonly started this thread marameo:

Hopefully some of the experts that were ripping on me previously can answer your questions.

Since I am writing far out of the money with a few months until expiration with the sole purpose of collecting premium vs. time decay. I can't help you here. For me to monitor the greeks it would be useless. I could pick the lowest delta option but the premiums are so low for those that they would not be worth the risk.

Jump right in here people, waiting on you....
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Old Aug 19, 2012, 1:45am   #17
 
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Re: Writing futures options uncovered...

Quote:
Originally Posted by optsonly View Post
Since I am writing far out of the money with a few months until expiration with the sole purpose of collecting premium vs. time decay. I can't help you here. For me to monitor the greeks it would be useless.
Well,I understand you point. I'd like to monitor the fair delta because I am focused on delta hedging, such as synthetic long/short straddles (long-term).
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Old Aug 19, 2012, 1:58am   #18
 
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Re: Writing futures options uncovered...

Quote:
Originally Posted by rathcoole_exile View Post

Whenever there is a Strong Bull signal, I will look to Write a Naked Put on it,
although sometimes I'll Buy a Call instead

Conversely, if there's a Strong Bear signal, I will usually look to Buy a Put
although I will sometimes Write a Naked Call instead.
hi RE, what makes you choose one or the other? anything fundamental or is it intuition - or a conviction that you are more right and thus want to profit more from buying rather then writing?

any other option type strategies you trade eg condors / straddles etc?
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Old Aug 19, 2012, 2:47am   #19
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Re: Writing futures options uncovered...

optsonly started this thread marameo:

Roger that. I am not holding the contract so no hedge here. I'm writing the options uncovered. Hopefully someone will reply for you.


For the mud slingers of my original post: Stocks - News & Commentary

Check out the option play recommendation for Dec corn. Give him a call and tell him he's an idiot also if you want.

Time for me and my smoking hot wife to grab some sushi...
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Old Aug 19, 2012, 1:41pm   #20
 
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Re: Writing futures options uncovered...

I like options in long/short combinations and have a method that suits me. I'm still a rubbish trader and forget to leave limit orders with my broker,however.
Options trading is dead simple:if you don't like the prices,don't take the trade, once you have learned how the Greeks work and done your calcs( I like iVolatility.com simple calculator). If the underlying has an implied vol of 20% you can make a reasoned choice about the options when vol is at great variance.
IE does the market expect more upside? I don't think anyone has a clue right now as the politicans are meddling with markets,and lying like a wotsit about the real state of the global economy.
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