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Selling Options on Futures?
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Selling Options on Futures?

  #6541 (permalink)
westhills california US
 
Trading Experience: Beginner
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On Jan 22 i put on EWK3K8 P(-2)2230 and EWK3K8 P(+3)1940 x10 IM. Since I have never experience the drop we realised recently I notice at the very bottom the premium on my position was 2.5 times the maintance margin(MM) requirment. Maybe some one can explain how that is possible please? I thought the idea was to get out before losses mount.

THANKS
BABAK

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  #6542 (permalink)
Germany
 
Trading Experience: Intermediate
Platform: TWS
Favorite Futures: Options on futures
 
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rajab View Post
On Jan 22 i put on EWK3K8 P(-2)2230 and EWK3K8 P(+3)1940 x10 IM. Since I have never experience the drop we realised recently I notice at the very bottom the premium on my position was 2.5 times the maintance margin(MM) requirment. Maybe some one can explain how that is possible please? I thought the idea was to get out before losses mount.

THANKS
BABAK

I am just speculating:

- I have a ES spread position open at Zaners, an they increased the margin to 100%. Maybe your margin was also increased.
- also by close of the market yesterday it calmed down. Maybe they only calculate a possible margin call b end of the day.

I would say: it depends on your broker. IF you have a contact person I would ask directly.

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  #6543 (permalink)
Germany
 
Trading Experience: Intermediate
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Favorite Futures: Options on futures
 
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ron99 View Post
The ES spread strategy I have been trading made it through this extreme test. I did not exit any positions. As I write this I have made back 90% of what I lost yesterday.

I will be adding more cash excess because this was too close for comfort. I'm going from 4xIM to 5xIM. 80% cash instead of 75% cash.


This was a good test of your strategy yesterday

I have a EW3J8 P2250(2)/P2000(3) open at Zaners with 4xIM and it was quite under pressure, but with still some room left.
(Since this account is at Zaners in the US, I will not be able to increase cash there in a short time.)

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  #6544 (permalink)
Cleveland, OH
 
Trading Experience: Advanced
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rajab View Post
On Jan 22 i put on EWK3K8 P(-2)2230 and EWK3K8 P(+3)1940 x10 IM. Since I have never experience the drop we realised recently I notice at the very bottom the premium on my position was 2.5 times the maintance margin(MM) requirment. Maybe some one can explain how that is possible please? I thought the idea was to get out before losses mount.

THANKS
BABAK

That's normal during an event like this week.

With 10xIM you never came close to a margin call.

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  #6545 (permalink)
Cleveland, OH
 
Trading Experience: Advanced
Platform: QST
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manuel999 View Post
I am just speculating:

- I have a ES spread position open at Zaners, an they increased the margin to 100%. Maybe your margin was also increased.

That increase in ES margin was for day trading. Not for options.

Day traders have lower margin than 100% on normal days.

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  #6546 (permalink)
Germany
 
Trading Experience: Intermediate
Platform: TWS
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Posts: 155 since Jul 2014
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ron99 View Post
That's normal during an event like this week.

With 10xIM you never came close to a margin call.

Do you know when the Margin call calculation is done? On a continous basis, or by the end of the day?

Yesterday I noticed at Zaner the price of the spread went up and down quickly at times, wide differences from one second to the next.
If you overstep your margin for a short time only, will you get a margin call already?

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  #6547 (permalink)
Legendary Market Wizard
Linz Austria
 
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manuel999 View Post
This was a good test of your strategy yesterday

I have a EW3J8 P2250(2)/P2000(3) open at Zaners with 4xIM and it was quite under pressure, but with still some room left.
(Since this account is at Zaners in the US, I will not be able to increase cash there in a short time.)

I have an account with DeCarley, but send my money to a British bank in Euro. This works very fast, and wiring the money is free of charge.

Best regards, Myrrdin

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  #6548 (permalink)
Germany
 
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Platform: TWS
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myrrdin View Post
I have an account with DeCarley, but send my money to a British bank in Euro. This works very fast, and wiring the money is free of charge.

Best regards, Myrrdin

Thanks. I was not aware of it that works. I send it directly to the US previously.
My main account with IB, but they refuse to send money to another broker, it seems.

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  #6549 (permalink)
Legendary Market Wizard
Linz Austria
 
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manuel999 View Post
Thanks. I was not aware of it that works. I send it directly to the US previously.
My main account with IB, but they refuse to send money to another broker, it seems.

I also hold an account with IB. The Money is sent to a bank in Frankfurt in Euro.

I never tried a direct money transfer from one broker to another.

Best regards, Myrrdin

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  #6550 (permalink)
Legendary Market Wizard
Houston, TX
 
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manuel999 View Post
Do you know when the Margin call calculation is done? On a continous basis, or by the end of the day?

The exchange calculates margins once a day, using settlement prices, although there have been very rare days in the past where they did have intra-day margin calls (to the FCMs) as well.

It gets tricky as exchange margins, are minimum margins, and as such brokers can increase them at will. Not only do IB have higher than minimum margins, but I believe they also calculate them real time. So not only will they not allow you to enter positions if you don't have enough margin, but they will also auto-liquidate you intra-day. Hence policies on this vary FCM to FCM.

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