E-mini protection using puts
- Thread starter stephenszpak
- Start date
zf trader
ES options do not trade very much but they are pretty easy to arb so if you split the spread you should get a fill.
This is a little stupid, but, once I own the put, and the market
crashes, let's say, and I desire to sell the put, someone HAS
to buy it correct? I say this because you infer that they are
not as liquid as perhaps the OEX options are.
(Also, I think I need a link to a on-line traders dictionary.)
Thanks,
Stephen Szpak
ES options do not trade very much but they are pretty easy to arb so if you split the spread you should get a fill.
This is a little stupid, but, once I own the put, and the market
crashes, let's say, and I desire to sell the put, someone HAS
to buy it correct? I say this because you infer that they are
not as liquid as perhaps the OEX options are.
(Also, I think I need a link to a on-line traders dictionary.)
Thanks,
Stephen Szpak
OK, an ES September 1k put is .50x3 on IB right now. Are those pure dollars - ie can I buy the right to sell somebody one September ES for $1000 for a measly three bucks, or even $1.25 if I split the spread?
Or is it "times 50", meaning it really costs 50 times what the quote is?
And 1100 is 2x8. That looks like pretty cheap insurance.
Or is it "times 50", meaning it really costs 50 times what the quote is?
And 1100 is 2x8. That looks like pretty cheap insurance.
TGregg
Quote from stephenszpak:
. . .once I own the put, and the market
crashes, let's say, and I desire to sell the put, someone HAS
to buy it correct?
--------------------------------------------------------------------------------
Theoretically, you could exercise it. But floor traders have such low trading costs, it's almost always cheaper to just sell it. Somebody will buy it just to make a little on the exercise, if nothing else.
Apparently "sell" and "exercise" , a option that I have
purchased, mean two different things??
Sorry, for slowing down this thread.
Stephen Szpak
Quote from stephenszpak:
. . .once I own the put, and the market
crashes, let's say, and I desire to sell the put, someone HAS
to buy it correct?
--------------------------------------------------------------------------------
Theoretically, you could exercise it. But floor traders have such low trading costs, it's almost always cheaper to just sell it. Somebody will buy it just to make a little on the exercise, if nothing else.
Apparently "sell" and "exercise" , a option that I have
purchased, mean two different things??
Sorry, for slowing down this thread.
Stephen Szpak
Try using that quote button under posts to help ya out.
Yeah. When you buy an option, you buy the right but not the obligation to buy (call) or sell (put) the underlying issue at the specificied price to the person who sold you the option.
For example, say MSFT is $27 a share and you buy a call at $25. That option gives you the right to buy MSFT at $25 from now until the expiration of the contract (never mind about European style). That's called an "exercise" when you use it. You can also buy or sell it.
TGregg
It has been a long time since I got into options. I sort of get
what you're saying though. The trouble I see here is that
once you exercise (if that is the word I want ) the option on
the E-mini futures contract you still have to sell the contract,
correct? I'm sure I've got the wording wrong, but my point is
this:
If one started with the OEX option, it exercises to cash I
believe.
If one starts with a option on a future what you get is
the futures contract. A EXTREMELY volatile one that has
to be sold in a treacherous market.
Have I got any of this correct?
Stephen Szpak
Quote from TGregg:
Try using that quote button under posts to help ya out.
Yeah. When you buy an option, you buy the right but not the obligation to buy (call) or sell (put) the underlying issue at the specificied price to the person who sold you the option.
For example, say MSFT is $27 a share and you buy a call at $25. That option gives you the right to buy MSFT at $25 from now until the expiration of the contract (never mind about European style). That's called an "exercise" when you use it. You can also buy or sell it.
It has been a long time since I got into options. I sort of get
what you're saying though. The trouble I see here is that
once you exercise (if that is the word I want ) the option on
the E-mini futures contract you still have to sell the contract,
correct? I'm sure I've got the wording wrong, but my point is
this:
If one started with the OEX option, it exercises to cash I
believe.
If one starts with a option on a future what you get is
the futures contract. A EXTREMELY volatile one that has
to be sold in a treacherous market.
Have I got any of this correct?
Stephen Szpak