Anyone trading futures options on metals or oil?

Discussion in 'Options' started by jwcapital, Dec 14, 2010.

  1. This past year was my worst on record. Traded only the S&P 500 emini options using IB with reverse gamma scalping. Eked out a profit of $300.00 on a $20,000 account. BTW, if I didn't scalp, I would have incurred huge losses. Anyway, I am using the rest of the year to explore other markets. Does anyone here have experience trading options (using any strategy) on gold or oil? Or any energy or metal for that matter? I would like to learn more from others rather than just relying on my "paper" observations. Thanks.
  2. I see no benefit to scalping vol on ES, so good for you for realizing it's not worth the effort. Better to eke out $300 and quit than express cognitive dissonance.

    I trade some OTC gold and oil options; vanilla and exotic. What are you looking to do?
  3. I want to trade IC's using gold (GC) and crude (CL) futures options. My days of IB's with scalping are over. These futures options appear to have decent premium on both the call and put side. Oil appears to be the better commodity for this strategy, for its ATM near month call's IV is higher (IC being a short volatility, positive theta strategy) than gold's. Also, oil's IC net premium 30 days before expiration is equal to gold's 45 days before expiration. This tells me that I get a bigger bang for the buck trading CL options. Margins are very small as well. Appreciate comments. Am I overlooking something?
  4. JPope


    I don't know OTC, but I love the cl options on globex. Great liquidity almost all the time (nothing at night, and they disappear momentarily on Wed mornings). I don't think you're overlooking anything, but don't underestimate crude's ability to move several dollars/session out of nowhere.
  5. So you plan to implement a passive condor strategy on CL? I don't necessarily think it's a great idea, but CL is tighter than GC for trading the two combos. They (can) margin those higher on SPAN than net-debit risk, but that's an issue with SPAN.

    You may want to look into the USO ETF for oil. The straddle and strangle markets are four pennies wide. You can often trade at fair-val. You have to trade a lot of them, but it's essentially a "pick-'em" market. Less commission on CL (1000 vs. 100 multiplier (1 lot vs. 20 lot in USO notional)), but a dime or wider market in each combo.
  6. 1) There may be some "weird" skew characteristics unique to crude oil that you're unaware of. Same thing with natural gas too. :eek:
    2) What about trading those two energies week-to-week based on their mid-week supply report instead of carrying a "passive" position several weeks through much more news and noise? :confused: