FX futures options Buying: Is it a lottery? or a business? | Forex Factory

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FX futures options Buying: Is it a lottery? or a business?

  • #1
  • First Post: Edited 6:01am Jun 4, 2019 5:03am | Edited 6:01am
I will be just posting the trades that I am going to take. And give a simple reason to trade for why? Just a journal. I will not make any effort to tell you what is fx future options. CME website has excellent learning material. In any case, motivated people will find their own way to learn about currency future options. I am not here to promote fx options trading.

EurUsd is heading towards breakout. Why do I think so? Thanks to v2vboni
https://www.forexfactory.com/showthr...0#post12280590

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Before going to bed I had put in an pending order for buying EUU Jul 05, 19 at 44 pips when the ask price was 49.
It did not hit and now has gone up to 70 pips. Had I bought last evening at 49, the profit would have been 42% on an investment of 49 pips in just one day .

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Practice makes a person perfect
  • #2
  • Jun 4, 2019 5:21am Jun 4, 2019 5:21am
I am now waiting for a pullback to hit my targetted 44 pips premium price today.

If it comes closer to even 50 I will revise it and buy it.
Practice makes a person perfect
  • #3
  • Jun 4, 2019 8:01am Jun 4, 2019 8:01am
EURUSD is correcting now.
If it corrects to 1.12 may be my pending limit of buying the option at 44 pips may be filled.
Let's see.
Practice makes a person perfect
  • #4
  • Jun 4, 2019 9:47am Jun 4, 2019 9:47am
200% Profit in a week.

Such opportunities you get maximum 8 times in a year.

Breakout can generate such returns .


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  • #5
  • Jun 4, 2019 11:04am Jun 4, 2019 11:04am
If there is no movement, the symbol stalls or remains flat, the price will come down because of time decay.

That's the reason Breakout should happen rapidly hitting TP level.

Let's see what happens tonight.

I am going to bed now.
Practice makes a person perfect
  • #6
  • Edited 7:07am Jun 5, 2019 1:09am | Edited 7:07am
An extra-ordinary year for option sellers!

An yearly return of 284% on margin deposit placed with a broker for trading.

Truly a low-stree trading environment .
Hardly required any adjustments.
Even the premium that is paid upfront
was not utilised to shore up the margin.
Channel size high and low was 1000 points .
Anybody selling call and puts bracket in the
range of 700 to 800 points would have
made 250 pips @12.50 or $3,125 for
each of three 120 -day duration trades
in a year by putting up a deposit of
$3,300 by selling in the brackets
of 700-800 pips or points.

It's an yearly return of 142% for a
conservative trader like me who
sets aside 50% of the margin as a buffer for
(a) coping with changes in margins that are
revised dynamically by the broker and CME
depending upon the volatility of the market and
(b) use the extra margin to do readjustment
trades as part of risk management.

Chart is of CME EU futures.
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  • #7
  • Jun 5, 2019 1:12am Jun 5, 2019 1:12am
For those who are familiar with MT4

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  • #8
  • Jun 5, 2019 6:27am Jun 5, 2019 6:27am
Now the premiums have dropped considerably and now sellers can make between 120 to 140 pips for 120 days duration.
In a year 400 pips or $5000 in a year as against margin deposit of $3,300.
Practice makes a person perfect
  • #9
  • Jun 5, 2019 6:33am Jun 5, 2019 6:33am
Despite being a volatile period 2017 also did not give a tough time to sellers. Though not as easy in 2019.

Adjustments or buying back options and selling them again as part of risk management was done. June 2018 - June 2019 required literally no risk management.
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  • #10
  • Jun 5, 2019 6:56am Jun 5, 2019 6:56am
I have sold put options targetting to earn from time decay.
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  • #11
  • Jun 6, 2019 5:25am Jun 6, 2019 5:25am
I have put pending order for buying 8 option contracts each at a price of 38 pips. Spot price was 60 pips. If eurusd corrects by 70 to 80 pips my order likely to trigger. Let us see whether the correction happens. And makes a profitin next two weeks by recovering toe spot price .
Practice makes a person perfect
  • #12
  • Jun 6, 2019 11:51am Jun 6, 2019 11:51am
Spot price of July expiry option leaped from 62 pips today to 93 pips, a 50% gain in one day.
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  • #13
  • Jun 7, 2019 8:05am Jun 7, 2019 8:05am
Quoting simnz
I have sold put options targetting to earn from time decay. {image}
Within 7 minutes of job data released, the EurUsd future option bought back with 35% profit. Sold at 150 pips and bought back at 98 pips.
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  • #14
  • Jun 13, 2019 8:06am Jun 13, 2019 8:06am
Quoting simnz
I am now waiting for a pullback to hit my targetted 44 pips premium price today. If it comes closer to even 50 I will revise it and buy it.
The Boat that I missed.
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  • #15
  • Jun 13, 2019 8:40am Jun 13, 2019 8:40am
Quoting simnz
{quote} The Boat that I missed. {image}
I'm sure you will catch the next one !

Masterrmind.............
Master your Mind then Master your Trades
  • #16
  • Jun 13, 2019 9:39am Jun 13, 2019 9:39am
Quoting simnz
I have sold put options targetting to earn from time decay. {image}
I have sold call option just now.
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  • #17
  • Jun 13, 2019 11:34am Jun 13, 2019 11:34am
Quoting simnz
{quote} I have sold call option just now. {image}
I have received 64 pips premium, which means my breakeven point is
Strike Price + Premium:
1.1350 +0.0064 = 1.1414
Futures Price has to go beyond 1.1414 for me to take a loss.
If the price dips to 1.1349 on the maturity day of 5th July, 2019 I will keep all the premium.
If it falls between 1.1350 and 1.1414 I will be losing only my commission and assignment fees.
Practice makes a person perfect
  • #18
  • Jun 15, 2019 3:16am Jun 15, 2019 3:16am
Quoting simnz
{quote} The Boat that I missed. {image}
Boat takes a U turn

Had the option buyer unrealistically held on to the winning position, time decay would have taken away the 300 PC winning.
Practice makes a person perfect
  • #19
  • Jun 15, 2019 7:45am Jun 15, 2019 7:45am
Quoting simnz
{quote} Boat takes a U turn Had the option buyer unrealistically held on to the winning position, time decay would have taken away the 300 PC winning.
One of the major reasons why monitoring PA and the state of current positions is a critical part of successful trading.

Masterrmind..............
Master your Mind then Master your Trades
  • #20
  • Jun 18, 2019 9:51am Jun 18, 2019 9:51am
Quoting simnz
{quote} I have received 64 pips premium, which means my breakeven point is Strike Price + Premium: 1.1350 +0.0064 = 1.1414 Futures Price has to go beyond 1.1414 for me to take a loss. If the price dips to 1.1349 on the maturity day of 5th July, 2019 I will keep all the premium. If it falls between 1.1350 and 1.1414 I will be losing only my commission and assignment fees.
I am liquidating this position now without exposing the position to two more weeks.
Picture shows my profit.
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