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There is no buyer on the other end when exercising an option. Do you mean selling your option? If so, yes, a buyer always wants to pay a lower price just like a seller always wants a higher price. Keep in mind, a European option may be exercised only at the expiration date of the option. An...

There is plenty of information online that outlines the basics of options. Keep reading, that is the only way you will learn. But to answer your question quoted above... I am specifically referring to call options here. The strike price is the price the buyer of an option can acquire the...

No, it should be $500. https://www.cmegroup.com/clearing/margins/intras.html#sortField=exchange&sortAsc=true&exchange=NYM&sector=NATURAL+GAS&clearingCode=NG&pageNumber=1

Under Time-in-force (TIF) select OPG.

I don't trade oil or any energy products. There's no particular reason for that other than it's just not what I specialize in.

The May contract has expired. The front month contract is June, which is trading at ~$14 x 1,000 = ~$14,000 notional value. The current margin requirement by the CME is $6,400, meaning you would need to only put out $6,400. If the position goes against you you would need to deposit more...

I didn't think of doing a synthetic short. Much safer play IMO.

It makes sense for them to do this given the price. I wonder if this is also a way for them to resume accepting new creation units and issuing new shares of the ETF if the request they made with the SEC is not approved. If that is the case, it should help keep it's price / NAV from getting too...

Because that is not how the contract is designed. It would be like saying why can't you put diesel and a gasoline engine.

@bone was referring to Monday's daily settlement on Monday, not the final settlement on Tuesday. Most clearing firms require customers who don't have the capacity to physically take delivery close out their positions 1 day prior to the contracts last day of trading, or expiration. This is why...

I realize you are just making a shit post (or at least I hope you are) but taking delivery on grains where you receive a warehouse receipt / shipping certificate is very different from taking delivery on oil. If you have the capacity to take delivery of oil, there are only a few clearing firms...

Since it sounds like you were, why don't you explain it to me? Make sure not to use words that are too big, I tend to get confused easily.

How is that relevant here?

On Black Monday S&P futures declined 29%. The points are less relevant than the percentage.

I'd say long USO is worse because of the premium but I get where you are coming from. If I had a gun to my head I would go long the future and an OTM put with it.

Here's an interesting article (along with comments) that addresses some of what I have pointed out in regards to USO over the past few weeks: https://ftalphaville.ft.com/2020/04/21/1587478056000/Can-the-USO-fund-collapse--/

Short USO, go long CLM0 (future). I can imagine a lot of people will be trying to do this which could make the stock hard to borrow. Imagine this potential scenario: You short USO, go long the future so have no directional risk other than the premium change in NAV. The premium goes from 36%...

USO is now trading at a 36% premium of it's NAV as of yesterday. This is because they need approval from the SEC to issue more shares. Until then, market makers are unable to exchange creation units with the fund to keep the NAV in line with the share price. If you want to take a gamble and...

I pulled them out of my ass so it's not a hard and fast number. I have not read the liquidation part of the prospectus so keep that in mind. What I do know is this. Right now the June contract has a margin requirement of $6,400. That means, if the price of oil falls below $6.40, the fund...

As Sig said, you can read the prospectus to see under what situations the fund would liquidate it's holdings. If it did so, it would then distribute any remaining cash to the shareholders shareholders. It would be unlikely for it to go to 0 so you would get something.