I'm afraid it doesn't make interesting reading...I've had some'' home runs'' ( F being the most recent )and I've had some catastrophic failures (BSC was a particularly depressing one).
What strategies do you guys use?
- Thread starter klurby
- Start date
My strategy is to buy low and sell high...
There are no symbols of a futures option but there is for the futures contract itself. For example, here is a trade I did back in June, which is still open.
SELL 10 /CLU1 1/1000 (mmy 201109) AUG 11 130 CALL @.09 LMT
The symbol would be /CLU1 which is the September Light Sweet Crude Oil contract. Look up the symbol and the option chain should show up below it.
About as small as you can get.
Delta = 0.01 or -0.01
Such a low delta means that if the underlying asset moves against me, my option position hardly budges. For me to lose, the underlying asset must make a substantial move against me in a very short period of time. This allows me to even be wrong and still profit. For example, I sold the $130 call on crude oil. This means I am bearish. I received $900 premium. If crude oil rises 20% from $100 to $120, and I am short on the futures contract, I would be losing practically everything I had. Not with selling far OTM options. The calls would STILL expire WORTHLESS. So I was wrong but I still kept the premium. Try that with futures, stocks, or long options! Don't forget time decay erodes the value of the option from day 1, which is exactly what the option seller wants.
Now, I do have risk management rules, which dictate I buy back if the premium doubles for naked positions, or triples on a particular leg of a short strangle. So, looking at the trade I posted above, if the calls reach $0.18 (double the $0.09 I received as premium), I get out and cut my loss, even if the option has a lot until it gets ITM. That takes discipline since there is the temptation to keep the losing position because there might be an extra 10% left until ITM.
Well, gotdamn. Nickels in front of a bulldozer has been discussed to the nth on this board, and since you have risk management, I won't say anything about it to you Betapeg.
But klurby on the other hand, do yourself a favor bruh bruh, don't even consider what Betapeg is doing without a couple years under your belt. You just asked how to find a futures symbol today, you don't need to consider selling dime puts yet. No offense intended, just some real shit.
But klurby on the other hand, do yourself a favor bruh bruh, don't even consider what Betapeg is doing without a couple years under your belt. You just asked how to find a futures symbol today, you don't need to consider selling dime puts yet. No offense intended, just some real shit.
I'm not recommending he do it. I'm just detailing how I do it. Whatever one wants to do with whatever I say is totally up to them and them alone. Certainly, practice makes perfect. I practiced using the thinkorswim paper trading platform for several months with NO CAPITAL before I put $1 into the strategy I use.
My biggest draw down did not exceed 2% of my total capital. The usual draw down is about 0.8-1.5%. I usually sell for about $1,000 of premium. Using my double premium loss stop rule, I buy back if the option rises to $2,000. So my loss is usually just the amount of premium I received. So I give back the premium I received and pay out the same amount as my loss. In this way, I cut my losses short, free up my margin, and enter into the next trade. The key here is to NEVER let a loss run because they can keep on running and running until you're bankrupt. Utilizing short strategies require that the trader have strict and well-disciplined risk management strategies because of the inherent so-called "unlimited risk" nature of going short any asset. The reality is, with what I do, the risk is actually limited by my loss stop rules and the option expiration. The rules protect me. My biggest enemy isn't the market, it's actually myself and how well disciplined I am to sticking to these rules. I do not recall letting a loss run past 2% of total capital so I like to think I'm pretty good at this trading gig
