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Confusion about globex open vs pit settle
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Confusion about globex open vs pit settle

  #1 (permalink)
Trading Apprentice
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Confusion about globex open vs pit settle

Hello. This is my inaugural post! Great forum. Thank you for having it.

So I am a beginner with a question about my last trade. I went long SI 12-10 at 22.17 carrying over after hours and then closed my position at 22.865 later last night. Inasmuch as this is the first time I have carried a position over, I am not conversant with the intricacies of what goes on during settlement since I usually get up at 4am arizona time to scalp before work.

What happens during settlement? The contracts are not liquidated and then 're-entered' when globex opens are they? It seems that would spike volume on the open.

Thanks in advance! Sorry if the answer is sadistically obvious. You have to start somewhere, you know?


Last edited by nepenthean; October 6th, 2010 at 11:08 AM.
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  #3 (permalink)
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nepenthean View Post
Hello. This is my inaugural post! Great forum. Thank you for having it.

So I am a beginner with a question about my last trade. I went long SI 12-10 at 22.17 carrying over after hours and then closed my position at 22.865 later last night. Inasmuch as this is the first time I have carried a position over, I am not conversant with the intricacies of what goes on during settlement since I usually get up at 4am arizona time to scalp before work.

What happens during settlement? The contracts are not liquidated and then 're-entered' when globex opens are they? It seems that would spike volume on the open.

Thanks in advance! Sorry if the answer is sadistically obvious. You have to start somewhere, you know?


You went long Silver 12-10 at 22.17 -> which time zone do you refer to?

Trading Session

All transactions during one session will have the same trade date. If you do not close out a position at the end of the trading session, the position will be carried into the next session. Usually this will lead to an increase of the maintenance margin for this position.

If you buy during today's session and sell after the close of today's session, the buy will be settled with trade date today (settlement tomorrow) while the sell will be settled with trade date tomorrow (settlement after tomorrow).

The trading session for Silver is the Globex session starting at 6:00 PM Est and ending at 5:15 PM Est next day.

Settlement Period

Each futures contract has a specific settlement period. Usually the volume weighted average price over this period is the settlement price. The settlement price is used by the exchange to calculate your profit, loss and the margin requirements to maintain the position.

For Silver the settlement period is from 13.24:00 Est to 13:25:00 Est.

Settlements

http://www.cmegroup.com/market-data/files/CME_Group_Settlement_Procedures.pdf

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Quoting 
You went long Silver 12-10 at 22.17 -> which time zone do you refer to?

Not a time, price.


Thanks for your help.

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  #5 (permalink)
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Fat Tails View Post

Trading Session

All transactions during one session will have the same trade date. If you do not close out a position at the end of the trading session, the position will be carried into the next session. Usually this will lead to an increase of the maintenance margin for this position.

If you buy during today's session and sell after the close of today's session, the buy will be settled with trade date today (settlement tomorrow) while the sell will be settled with trade date tomorrow (settlement after tomorrow).

The trading session for Silver is the Globex session starting at 6:00 PM Est and ending at 5:15 PM Est next day.

This is an extremely useful info. This also implies that on your statements for that day, you will see on the long @ 22.17 and the next day's statement will show the exit as well. I am referring to the Equity Run, not what your platforms shows.
This is where platforms showing and statements confuse traders.

PM with any questions about optimusfutures (800) 771-6748 (561) 367 8686. THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES TRADING.
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nepenthean View Post
Not a time, price.

Thanks for your help.

This is an example of cultural bias and anchoring as well.

Cultural bias: Down here the time 10:17 PM would be referred to as 22.17 h.

Anchoring: Market close of US index futures in CET (Central European Time) is at 10:15 PM or 22.15 h. So if I see a number like 22.17 this should be shortly after the market close of US index futures and cannot be the price of silver futures . I do not trade silver futures.

Why do I write this here? Because anchoring is powerful driver of our behaviour and is ever so present in trading, whether we like it or not. Anchoring prevents us from entering a long position if price has increased, as we still have in mind the prior price, which was lower. So it suggests to sell after price has increased not to buy. Anchoring is the mother of all mean-reversion and counter trades .

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Interesting, thanks.

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