Selling puts on FCOJ at 50 strike

[short&naked]

OJ has been ranging for decades. If the strike price is ever hit, one could always own OJ futures at 50 USD. Anybody doing this?

 

[traderTX]

what month / yr, how many, and what price?

 

[nazzdack]

Quote from short&naked:
OJ.......

It's not worth it for many reasons, the most important of which is that those options have no "juice" in them.

 

[short&naked]

Quote from nazzdack:

It's not worth it for many reasons, the most important of which is that those options have no "juice" in them.

LOl. Liquidity?

What are the other reasons?

 

[traderTX]

no he meant there is no premo in them...although yes...liquidity a concern too. Usually in OJ options, if you think its a level that can't possibly be hit and you find someone to buy your writes at that strike....yea...it'll find you

 

[nazzdack]

Quote from short&naked:
.......other reasons?

1) Right now, you'd be lucky to get more than two ticks to short-sell those puts. It's not worth it.
2) The bid-ask spread gets "wider" with illiquid options.
3) In a faster moving market, the few locals there are will "hesitate" before letting you in or out of a position. That would be less likely to happen in a liquid market.
4) I believe there is no electronic access in that market. You would be captive to the pit-session.
5) With physical commodities, speculators prefer to trade from the long-side by buying calls and hoping for the market to go up to the moon.