Writing futures options uncovered...


Junior member
15 1

I read the book a while back and it did add some fuel to the fire for me. I've been trading for about 15 years and only recently, few years ago, I started to really take note of the option premiums. It can be a slow way to make money but I would rather be fishing the flats versus being glued to a computer watching quotes all day. I am probably going to move this to the forex factory forum That is a friendlier environment and I do trade FX some.


Junior member
15 1

..adding to that....

Just a few thoughts: Depending on how fast the market moves and how fast the premium deteriorates, you could exit a trade in a few weeks with a good chunk of the premium gone and in your pocket. I'm sure this is old news to you but if I've got 40, 50, 60% of the premium in hand then I'm taking it. It's rare to hold an option sold with 90 days until expiration for 90 days. I'm working on getting more aggressive in a few markets and, for instance, instead of going long a contract within a trend sell puts instead while keeping an eye on the fundamental and seasonal aspects of the market along with a few technicals. Less chance to get whipsaw stopped out when selling option.

I'm sure you read through the thread and saw the few posts from the several people basically calling me an idiot saying how can you trade something when you don't know what the value is of what you are trading, which is 100% true. With my few thousand posts at the forex factory, not one negative comment like the ones here. Anyway, we are not buying options, we are selling them. The greeks? What's important here??? You know the answer, low delta.


Junior member
26 1
Totally agree with taking some or all off the table when over 50% earned. I usually sell next month out and think about covering when it becomes current month or the theta, amount earned per day, is less than can be got from the next contract out.

By the way there is a good thread on selling futures options over at Big Mike Trading if you are interested. Sensible comments and useful info too.

Selling Options on Futures? - Commodities Futures Trading



Senior member
2,690 276
optsonly, have you ever experienced a large move in the underlying accompanied by a spike in wing vol? Just curious...


98 0
This threads been quiet for a while, so thought I'd post on a recent trade I did in late August, 21st to be exact in Gold options, just to through some ideas out there on analysing the markets for good option sale opportunties.

The attachments make it clearer, but over the last few years I've worked on combining seasonality, using Moores and Gary Kayman's Trends in Futures service which does a good job of catching the larger trends and also analyses disegregated COT data, which is something I follow closely to confirm trades.

With GCZ, there was good technical structure in the rising wedge, a strong September seasonal approaching and big money was starting to add to their long positions, overall a great set-up to sell puts on a confirmation breakout.

Which is what happened, selling the 1500 puts at the $1638 mark for 13.50.


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4 0
Margin for selling options: "Usually" the margin required to write options is about 2X the premium collected. Contact your broker for specifics. Also, some brokers might not allow new traders to write options if they are new to trading. Brokers have to cover themselves as well against potential unlimited risk. I would too:cheesy:

which broker are you using ? I use IB and their margin for naked options is much greater than 2x premium
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