How to Balance Risk and Increase Yield with Commodity Option Strangles


Jan

6

2017

How to Balance Risk and Increase Yield with Commodity Option Strangles

Michael Gross Trains Option Sellers How to Sell an Option Strangle on a Commodity to Target a 50%+ Yield (with corresponding risk).
  1. Please consider using a black marker, as all other hues are quite difficult to see in videos.

    Thank you for the lesson on strangles; I used that strategy several years ago on the OEX.

  2. Hi James/Michael,

    You make regular reference to Volatility being high / low. How in practical terms do you measure / assess volatility for the options you are selling?

    I am familiar with option implied volatility and use this in my premium selling for index products but my broker (interactive Brokers) does NOT show option implied volatility for commodities.

    Would appreciate your thoughts on how to ‘read / establish’ option volatility for commodities.

    Thanks for your insights.

    • Michael Gross Says:
      January 9, 2017 at 3:12 pm

      Hello Paul,

      Good question. There is a VIX for some of the individual commodities, such as oil and gold. However, the best way is to use the software that measures historical vs. implied volatility. We use CQG. However, a short cut is to subscribe to a service that measures this for you. You can look into a company such as Optionetics.com. Or, for a more reasonable price, our friends over at Moore Research Center put out an excellent gauge daily. You can check them out at http://www.MRCI.com.

      Thanks and hope that helps.

      Regards,
      Michael

  3. Ron Yakus Says:
    January 7, 2017 at 8:37 pm

    Good webinar….Very informative……Thanks.

  4. Thank you so much for the videos…learning a lot

  5. MT Murphy Says:
    January 6, 2017 at 10:16 pm

    Light green is a poor choice of color. Not clearly seen. Black or dark blue would be better

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