They quoted the 12.99 rate to me when I first asked about opening an account. I told them (by email) I was with IB where the comms are 2.32, but wanted to use OX because of the better margin, and could they put me on the 3.50 rate, please.
I should say that if someone is bidding higher than fair value for the option, like KCU3 300C, then you can use that price.
Even if they settle the option higher than it should be because it is trading at the high level, like the 300c, the margin is still calculated based on the change in futures not the option settlement price (I believe, haven't checked lately).
Fair value=option settlement + (option delta * futures net change)
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It just blows my mind when I see contracts that are far OTM trading on expiration day.
For example GCM3 1250P traded 2 hours ago. It is 130 OTM. I can't see any reason for someone to buy it today to put it on as a new position. Maybe I'm wrong about that.
So if they aren't buying to put it on as a new position then they are buying to trade out of a short position. But again that makes no sense. Why give up the $10 plus fees and commissions per contract? Do people not know how options expire? I bet there are some that don't.
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Obviously we don't know what goes on in the minds of the traders, but keep in mind some trades may be executed as part of a spread or a more complex series of trades. One only sees one leg of the full transaction, which may not make sense.
The only market that I have been liking is crude. I've got the Aug70 puts on and I'm watching Sept wheat. Been doing some credit spreads on the SPX and RUT and may open another account with TOS because of the lower index and stock option commission there.
Congrats on those coffee calls at 300 for those that took them
What's up my fellow option sellers? Thanks Ron99 for alerting everyone to the coffee calls. I sold a bunch of those myself but my strikes were a bit closer to the money than KCU3 300C. Has coffee hit a bottom yet? I know the seasonal charts say the low usually occurs in mid June.
I noticed that the Trade and Profitability Calculator on OX is still not functioning correctly. It has been a while already. Anyone heard back from OX regarding this issue?
Hey opts, what wheat strikes are you looking at? What month? Puts? Calls? Strangle? Just curious.
CL appears to have been stuck in this $87-$95 range for a long time now too.