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I agree with this, so I feel like there isn't any flawed assumption. From the point of view of the arb, the margin matters a lot though, since it is what allows them to keep ES and SPY options inline. The margin requirements determine how much of their capital they can use to hold open the...

I pulled the numbers from the CME website and the CBOE margin doc. It isn't from the broker. I don't believe I am mixing them up, since they are all based on the same underlying. There would be an arbitrage opportunity if they weren't the same in payout.

The core of the question wasn't really about buying power, but counterparty risk. I was hoping to learn more about how that is mitigated.

Checked their site, but they said they were missing data for several time periods on QQQ. Also, the data only goes back to 2005?

It's true that I can't take the funds out right away, but after selling shares, the broker does let me buy into a new position immediately.

Context: I am looking at the best way to get long leveraged exposure to the S&P500. From my understanding, buying a call and shorting a put should have the equivalent payout as shorting a bond and buying the stock (via put-call parity). However, going long on a Futures contract should have...

I too have been looking for historical options data, but from what I can tell the name of the game is accuracy. All datasets have errors in them, what you are paying for is not options, but brand. Getting free data would be good for backtesting, but for actual trading I would pay the extra...

Do brokers track your keystrokes? Yes, at least for the E-trade when I tried. The easy way to tell is open up Chrome Dev Tools (press F12), and watch the network traffic as you type. It's not really that bad, because it was for things like autocompleting the symbol name. It didn't send...

Hi again, and sorry for possibly obvious question: When a trade is made, there is a trade date and a settlement date. On the settlement date, the securities have to be delivered, as well as the money to the other party. If one of the parties is nearing the point of insolvency, and is...

Sorry, I am new to this terminology, I assume this means to move the long shares over to cover the short shares? In this example, are the margin requirements different since you own the shares? Reading online it seems there is a 150% margin requirement, but if you already hold the shares, it...

I am looking at this from a programming point of view, so the details matter more than they normally would. A tricky case where "Buy closes an open position" and "Buy to close doesn't open a new position" seem to not work together. For example, consider the following series of events: a)...

I had planned to do this, but wasn't sure if it it being allowed was something specific to my broker or not. This is what I guess the core of my question is: aside from tax purposes, there doesn't seem to be a reason to be both long and short the same security at the same time. Thinking out...

Sorry for a possibly dumb question, but I'm trying to see if there is any difference between these trade types, aside from helping traders avoid a mistake? For example, if I am long SPY, and I enter a Buy to Close (or Cover), it doesn't seem substantially different than a plain old Buy. I am...

Thanks again for the reply. Is there any place you'd recommend reading more about it? I think I have exhausted Investopedia. Not sure what you mean here. The volatility smile should be per security; not sure if you mean indices in general. Also not sure what you mean by single names...

It was two levels deep in, but I think this is the quote I was looking for, that you mentioned in the first post: * http://us.spindices.com/documents/methodologies/methodology-sp-equity-indices-policies-practices.pdf

I have looked at the article here, but I think it is missing the details. I was hoping to also find out where Standard and Poor's has official documentation on the index calculation, which I can't seem to find on Google. For example, CBOE has good documentation on how the VIX is calculated.

I'm trying to wrap my head around what the IV smile means for a stock and I have some ideas, but wanted to make sure they aren't misguided. In my case, I am considering buying SPY LEAPS (e.g. 2 years), and noticed that the bottom of the IV curve is also approximately where I expect the shares...

If Musk could sell a large portion of his shares, and the scenario laid out in the video is true, it would destroy the remaining stock that Musk still has in the company. It would be a massive payday for him, but would lower the value of the rest of his holdings. In other words, if he or the...

First: thanks for the response Same Lazy Element! I think this raises another question: what should the sum of all the weights add up to? If the value of every company doubled, the SPX would itself double, but the weights would be the same. The index itself needs to be relative to a...

I'm trying to get a better understanding about how indexes are constructed, and there doesn't seem to be a lot of info about the specifics of the S&P 500. Most people know that it's a market cap weighted index, but there's a lot of details about what that means. Some questions: 1. How...