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Options on Futures & Stocks If you have questions about options trading, or if you want to post comments or just share your knowledge and experience about option trading, this is the place for you.

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  #11  
Old January 5th, 2012, 01:34 PM
LanceW LanceW is offline
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Quote:
Originally Posted by myrrdin View Post
In the long term, the number of winners is in the range of 75 %.

I do not do any "repairs" to trades (with only very few exceptions), but close them either at 200 % or at a defined value of the underlying (usually a strong resistance) which yields a similar value of the options.

When choosing the options to sell, I put a strong emphasis on fundamentals (seasonals, supply & demand, COT).

Ernest
okay, I am going by high prob of expiring worthless and the charts. I wish I had the seasonality charts but I don't.

Lance
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  #12  
Old January 6th, 2012, 12:16 AM
myrrdin myrrdin is offline
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MRCI offers the seasonality charts in excellent quality at a reasonable rate.

Ernest
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  #13  
Old January 30th, 2012, 12:25 PM
LanceW LanceW is offline
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Originally Posted by myrrdin View Post
I usually buy them back at 10 to 20 % of the original value. Usually you get there significantly before expiry, I do not like carrying risk with me without the chance of a profit.

Once in a while I even buy them back earlier if the fundamentals of my trade have changed or a significant resistance has been broken (against my position).

Best regards from Austria, Ernest
Hi Ernest,

I am trying to figure out the best trading plan and strategy. This month was basically breakeven for me as my first month of trading options. I had 4 good ones and then the NAT Gas an now COTTON #2 have gone against my position. Both of them looked good on the chart and fundamentals too.

I signed up for the Moore Research MRCI online so that I can get all of the seasonal charting.

Ernest, I have a small account about 20k. I am trying to high probability trades. You mentioned before that you try to do trades that have a probability of 70-80% in your favor. Also you mentioned a premium of about $6-800.00 per option sold. You said a risk of 200%. I believe.

So can you walk me through a trade that you had so that I can see how you handled it?

I am wondering how many days out from expiration you are filtering and also what do you mean by 200%... do you mean that if you sell an option for 600.00 you get out when it goes to 1200.00, the fundamentals change, or???

I would appreciate any help.

What I am talking to my broker about doing is taking 3 days into a trade and if it doesn't go my way just getting out....... more trades but also limited risk at the same time...

thoughts?

Alan, I would also like input from you or joe or andy if possible. I want to learn as much as possible.

Thanks!

Lance
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  #14  
Old February 10th, 2012, 10:39 AM
myrrdin myrrdin is offline
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Lance,

everything is correct, what you write about my trading.

Guiding you through a current trade is difficult at the time being, as due to the very low volatilities in the commodities market I closed all my short options trade some weeks ago, and did not open a new one. (That is the reason why I waited with my answer.) But of course I can give you my opinion on your questions.

I filter 3 to 6 months in advance. In many cases I get out according to the 200 % rule, which you describe correctly. But there are cases where I make an exception. When the underlying is just below an important resistance when my short calls reach 200 % I only get out beyond this resistance. For me it is important to make the decision when to exit in advance. Not necessarily at the beginning of the trade, but when it goes close to the 200 %. At the time when you have to push the button to exit the trade or not, the decision already should be made for some time.

I do not get out after three days, when the trade goes against me. (As long as the fundamentals have not changed.) The advantage of selling OTM options is that you do not have to make such decisions every day. Lean back until the options are at 150 or 170 % of their original value. In case oyu are not completly wrong this usually takes weeks. I also get out when my options show some profit and the fundamenals change. In this case, I take the profit.

What is important to me: There are times that are god for selling options, and there are others. In 2012, I did not find any options I wanted to sell. Thus, I concentrate on others methods, and have my eyes open.

Good luck !

Ernest
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  #15  
Old March 25th, 2013, 12:37 AM
avamorcle avamorcle is offline
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I also think about that.
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THE RISK OF LOSS IN TRADING FUTURES CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN FUTURES TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. PAST RESULTS ARE NOT INDICATIVE OF FUTURE RESULTS. HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT.