Futures fungibility/scaling out

E

erlewine

Maybe someone can answer this question - if I'm long 1 June pit (big) S&P 500 contract and then scale out of the position using 5 June e-minis, how do brokers treat the resulting position? Will my margin requirements drop to zero, and can I just keep it open until the contracts expire without wasting money on commissions and slippage to reverse it?

To throw a wrench into this, does it make any difference if the commodity is non cash-settled i.e. long 1 big soybean contract, short 2 mini beans (or whatever the ratio is to make my delta 0).

Thanks
 
The ES and SP are fungable. I do not know about the commodities.

But look, call your broker and make sure of all their ins and out. I would never trust something like that to anything that did not come directly from the horses mouth.

nitro
 
I remember that for the ES/SP, margin will be 0, but, your broker will likely carry 2 positions. You will probably have to phone your brokers to offset these.
 
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