S/R Emini Journal

[Buy1Sell2]

Quote from volente_00:

Selling premium is less risky in indexes than in specific stocks that could move huge on news.

agreed. ES is one of the most mean reversion markets there is.

 

[4re]

Quote from romik:

So, hypothetically speaking, if I was to buy some calls 2 days ago, I could have doubled the premium by now, correct?

I did on the q's

 

[volente_00]

Quote from romik:

So, hypothetically speaking, if I was to buy some calls 2 days ago, I could have doubled the premium by now, correct?

Depends on what you bought, but yes it was possible but being OE week it is also very risky.

 

[Buy1Sell2]

Quote from volente_00:

Yes but futures do not expire monthly and there is basically zero slippage.

Slippage becomes less important on longer term trades which would be option trades. Also, ES options are traded electronically and it is very easy to see the actual bid/ask as opposed to going into the pit etc. One can place a limit order between the bid/ask in ES and generally get filled and that eliminates a lot of slippage. Spread in ES options many times is about 3 ticks and so yes slippage is worse in options than futures, but it can be controlled.

 

[romik]

Quote from volente_00:

Depends on what you bought, but yes it was possible but being OE week it is also very risky.

OK, thanks everybody.

 

[volente_00]

I did not realize you were talking about options on futures. I was talking about options on indexes such as spy, qqqq, dia.

 

[4re]

Quote from Buy1Sell2:

Slippage becomes less important on longer term trades which would be option trades. Also, ES options are traded electronically and it is very easy to see the actual bid/ask as opposed to going into the pit etc. One can place a limit order between the bid/ask in ES and generally get filled and that eliminates a lot of slippage. Spread in ES options many times is about 3 ticks and so yes slippage is worse in options than futures, but it can be controlled.

I totally agree. The less volitile stocks the market makers can hose you though. That was my problem on CAL. Both getting in and out.

 

[Buy1Sell2]

Quote from 4re:

I totally agree. The less volitile stocks the market makers can hose you though. That was my problem on CAL. Both getting in and out.

Yes, Electronic options on indexes would be my preference. I do trade Grain options in the pit, but again using limit orders and long term trades. That way slippage and commissions are much more advantageous.

 

[4re]

Quote from Buy1Sell2:

Yes, Electronic options on indexes would be my preference. I do trade Grain options in the pit, but again using limit orders and long term trades. That way slippage and commissions are much more advantageous.

I have thought about looking into options on commodities but never have tried it.

Romik,
If you look at a 6 month daily chart you will that the BB's had gotten very tight right before I entered so I was expecting a pop in one direction or another. So the straddle worked for me. I tend to use the BB's more than sitting around figuring the greeks. Before I enter the trade though I do look at the greeks to determine the best possible contracts to buy.

 

[romik]

99/95.50