While we are in the subject of strangles. Do you think the strategy would apply to narrower base indices such as QQQ, SMH, PPH options? I would think the edge would be present there as well due to absence of natural sellers. Margin is probably less and the b/a spread is probably miniscule compared to the OEX spreads that are $1's wide!
hi deaux. Futures options as in sp futures? any other narrower based futures options? and are they open outcry instead of elec? thanks
Pretty much only broad based indices have futures options. Most narrow based do not even have futures to my knowledge. The large SP contract (250) trades pit only during day hours and Globex at night. The mini's (50) trade electronic 23.5 hours a day during the week. Volume on the mini's is thin at best and non-existant at night, the large contract has better volume but the spreads on both are wide to very wide depending on the strike. I see Oxeye trades FTSE and Dax futures options. Does anyone know if I can trade these through IB? I see the FTSE futures options available, but couldn't locate the contract specs on the Eurex or Liffe site. I found the index options, but not futures options. Thanks ktm
depends on the spread ...approx $20,000 if 50 pts out and around $10,000 if 100 pts out...more or less
That's not bad...sorry to bug you, but I don't get option quotes anymore. Right now, the S&P is around 1029.00. So, if I wanted to sell a 1039.00 call and a 1019.00 put, what kind of premium are we talking about. Thanks (November)
see http://sites3.barchart.com/pl/vsn/optqte.htx?sym=SPZ3 1040 call prem around 12.80 and 1020 put prem around 16.00
Sorry, forgot they don't sell 1039.00...hehe (it's been awhile) Thanks for the link...premiums look nice
premiums are nice but a short strangle only 10 points away from the strikes would result in a big loss. 100 points away still comes with risk.