broker to box chain options on CME ES futures

Robert Morse said:
This is my 2 cents from what I know about Futures accounts. When you buy or sell a future, cash does not leave the account like when you do that with stocks. If your account has $100,000, and you want to buy a T-bill for $90,000 to get interest you can. You want to avoid your equity dropping to owe interest, so doing this with 100% makes no sense. If you go out and buy futures with a margin requirement of, say $80,000, you are not borrowing money. However, Options must be paid for. If you buy $80,000 in options, $80,000 leaves your account. By selling the BOX as described, it will offset the debit from the options. It will not remove the margin requirements of the options. Because of that, I see no benefit to doing this. I only see you incurring fees. I do see the benefit to funding with T-bills if you do not buy options and only trade futures.
More...

does cash enter your account when you sell an option on a future? I thought you just put up the marked to market while the broker will haircut your account for the risk margin, like with a future.
 
newwurldmn said:
does cash enter your account when you sell an option on a future? I thought you just put up the marked to market while the broker will haircut your account for the risk margin, like with a future.
More...
When a customer SELLS an option the proceeds of the transaction would become part of the cash balance of the account.
 
You must log in or register to reply here.
Back
Top