Recent content by kv1289

I've done a decent amount of research about the mechanics of short selling but I still have a few unanswered questions. In an account with 30% margin requirement and 60k in cash. Purchase 100k notional of stock ABC and post 30k for margin. Short 100k notional of XYZ and post 30k of margin...

TD rep told me there is no stock loan fee on short stock. Is this true? If I short sell 100k of stock XYZ and post the required margin, my daily cost of carry is $0?

With futures you get span by default. It's in equities where you have to post 100K+ to get portfolio margin.

Is there any way to view the exchange guaranteed butterfly ticket at IB? For an example, on IB if I send an order to buy CLZ0/CLF1/CLG1 butterfly does it show up on the exchange traded spread ticket? Or do they just hold the order until it becomes marketable? Thanks

How about in this scenario: Index has a 20% circuit breaker Index is made up of sum of constituents A and B At time T-0 A = 100, B = 200, Index = 300 You sell the same day expiration 235 P for $5 ( Just outside the 20% circuit breaker) At time T-1 A = 70, B = 140, Index = 240 (Index has hit...

I would stay away from market orders when trading options. If you can't get filled at mid try to work the order somewhere between mid and the far side. Give it some time, sometimes a MM actually has to look at your order and fill it. Meaning the algo may not fill it immediately. Yes, MM will...

Yes that is correct, for an energy product like CL there is more volatility near the front.

Depends on your intent.... In either case futures trading revenue will be marked to market at the end of the year. If you are asking from a trading standpoint then yes the volatility between serial months is more comparable on deferred contracts. You will generally find more liquidity on the...

Think about the curve like a diving board. The front of the curve (Where the diver jumps off) moves much more than the back of the diving board. Therefore even though you are notional neutral (short 1 contract, long 1 contract) the short leg (front of the diving board) will move more than the...

Couple cases I can think of where it goes wrong 1. Before expiration, you get exercised on the short strike and the broker liquidates the stock due to insufficient margin. You could experience large pnl from the open option legs. 2. The options expire with underlying between the vertical...

Can you give us some more details on the exact series of events. Did you hold the position to expiration? What broker do you use? After being assigned did you get auto liquidated or did you decide to exit the position? As some others have stated, I'm curious how the option being exercised...

The flash crash was before my time but I've heard some more experienced traders talk about how order books completely vanish in even the most liquid products (Yes including ES, SPX, etc.). If there is no market in the underlying there is no way a market maker is going to give you a two sided...

Is this concept true for skew as well? If you put on a 1x1 25D/15D vertical spread are you closer to weighted skew neutral despite the notional vega difference?