Futures Options and Assignment

H

hetrazom

With stocks, each option contract represents right/obligation to buy/sell 100 shares of underlying [stock].
I just want to confirm relationship of futures option contract to the (underlying) futures contract. Does one futures option contract represents right/obligation to buy/sell one futures contract? If exercised, you are assigned a long or short position in the underlying futures contract?
 
hetrazom said:
With stocks, each option contract represents right/obligation to buy/sell 100 shares of underlying [stock].
I just want to confirm relationship of futures option contract to the (underlying) futures contract. Does one futures option contract represents right/obligation to buy/sell one futures contract? If exercised, you are assigned a long or short position in the underlying futures contract?
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Yes. If you option is ITM at expiration, you get a long or short futures contract.
 
hetrazom said:
Does one futures option contract represents right/obligation to buy/sell one futures contract? If exercised, you are assigned a long or short position in the underlying futures contract?
More...

Yes, you could assigned a Futures contract long or short.
You need to pay attention to the dates that the Futures contracts could be delivered.

Weekly and end-of-month (EOM) options on ES Futures provide European-style expiration...Just as FYI in case you consider it.
 
Option_Attack said:
Wouldn't mind a truck load of pork bellies delivered. Bacon!
Yeah I know, bellies are no more... :(
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Haha, I'd love to be able to trade them at CME. Bacon has been the shit for over ten years now! Bacon bacon bacon! They all be crazy about bacon!
 
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