ES Sept. options expire next friday(9/19)...do they trade on friday(9/19) or not?

increasenow · Sep 13, 2008

Quote from jwcapital:

For September and the other quarterlies, the options expire on Friday at the open. A special opening quote is published and all ES futures and options are settled based on that special opening quote. The last day of trading the ES futures is Thursday at 4:15PM. A lot of things can happen between 4:15PM and Friday's special opening quote. When I have any long option positions, I exit them on the Friday before expiration or the following Monday--the latest. If I am short naked options, and they are far OTM, I let them expire. If it is close, I look to close them before Thursday's close. Even though the Sep ES is thinly traded, it does keep up with the S&P index. If I trade any same-month spreads (combos of long and short options), I exit them either the Friday before expiration or the following Monday. For serial expirations (where ES FUT and FOP expire on Friday at 4:15PM and are settled based on the close of the ES future), I basically follow the same rules.

thanks...how many ES long/short combos could you have active at any given time?

jhucti · Sep 13, 2008

BTW, how do you exit an option that is ITM but with wide bid/ask spread? Trade is thin at the ITM end.

JohnGreen · Sep 13, 2008

jhucti,

You send in a limit order at the midpoint or a few cents off it and hope it is traded. Do this on Thursday afternoon with say a half hour to go. Remember that other retail traders will be also looking to buy and sell that contract (someone may have the other side of the spread in mind).
If that fails to garner a fill in a few minuutes, then cancel and replace your order and take a few cents (usually about 0.10) off if you're selling.
You can always exercise and sell, but there are some risks to doing that. It's usually wise to accept a few cents less and avoid those risks.

jhucti · Sep 13, 2008

Quote from JohnGreen:

jhucti,

You send in a limit order at the midpoint or a few cents off it and hope it is traded. Do this on Thursday afternoon with say a half hour to go. Remember that other retail traders will be also looking to buy and sell that contract (someone may have the other side of the spread in mind).
If that fails to garner a fill in a few minuutes, then cancel and replace your order and take a few cents (usually about 0.10) off if you're selling.
You can always exercise and sell, but there are some risks to doing that. It's usually wise to accept a few cents less and avoid those risks.

Very helpful advice. Thanks a lot!

increasenow · Sep 13, 2008

what are some margin requirements you get per average credit spread...example: ES currently at 1240 and sell 1190 put and buy 1170 put.etc...

trader_arb · Sep 13, 2008

Quote from increasenow:

what are some margin requirements you get per average credit spread...example: ES currently at 1240 and sell 1190 put and buy 1170 put.etc...

http://www.cboe.com/tradtool/mCalc/default.aspx

increasenow · Sep 13, 2008

Quote from trader_arb:

http://www.cboe.com/tradtool/mCalc/default.aspx

thanks man...totally appreciate it...but...this is for normal equity options and not futures options like the ES (emini SP 500)

jwcapital · Sep 14, 2008

Quote from jhucti:

BTW, how do you exit an option that is ITM but with wide bid/ask spread? Trade is thin at the ITM end.

Two ways--one, IB calculates fair vale of the option. So, I have pllced limit orders for the fair value, and they get executed. Also, if you place a limit order halfway between the bid/ask, it gets filled. Since I have used IB, the ITM options get closed out without a problem. Is it because of IB? I don't know.