Gambling on Weekly S&P500 options

[FSU]

Thank you for the information. It doesn't match with the information FSU says. Did I miss something?

The link provided states the overnight session is 2am to 815 ct. I referenced Eastern Time when I said the overnight session was 3 to 915am. Same thing, different time zones.

 

[Same Lazy Element]

Did you take any assignment so far ? It can be very painful

How so?

No assignment because the /ES options are European style (except for the options that expire this coming Friday) meaning they can only be exercised on expiration day.

Weekly (Mon/Wed/Fri) and EoM options are American, expire into the futures instrument. It's only the quarterly options that are European and expire cash based on SQ.

 

[The Rookie]

Yes, you did miss something, the respective time zones. CBOE is in Chicago.

Thank you got it

 

[The Rookie]

The link provided states the overnight session is 2am to 815 ct. I referenced Eastern Time when I said the overnight session was 3 to 915am. Same thing, different time zones.

Thank you. I learned something new. You can buy and sell at that time but the order won't be executed until cash open?

 

[.sigma]

May I ask how long you are doing this and how you avoid assignment? Do you put your short leg deep OTM? I think assignment is inevitable in the event of black swan market crash.

well yeah, in a black swan.. but normally assignment is rare.

 

[FSU]

Thank you. I learned something new. You can buy and sell at that time but the order won't be executed until cash open?

Not sure what you mean by "the order won't be executed until the cash open". The SPX options trade through the entire session. You can buy and sell and if your price is favorable to the MM, your order will be filled. The markets are priced based on where the futures are trading.

 

[B Lucci]

Weekly (Mon/Wed/Fri) and EoM options are American, expire into the futures instrument. It's only the quarterly options that are European and expire cash based on SQ.

The Weekly, Weekly Monday, Weekly Wednesday and End Of Month /ES options are European Style exercisable only on expiration day. The Quarterly /ES Options (December expired last Friday) are American Style options which can be exercised until 6:30 p.m. ET on any business day the option is traded.

European options which are in-the-money on the last day of trading are automatically exercised. A 4:00 p.m. ET price fixing based on the weighted average traded price fixing (symbol ESF) of the E-mini S&P 500 futures in the last 30 seconds of trading on expiration day (3:59:30 p.m.-4:00:00 p.m. ET) will be used to determine which options are in-the-money. Contrarian instructions are prohibited.

An American option exercise results in a position in the underlying cash-settled futures contract. In-the-money options, in the absence of contrarian instructions delivered to the Clearing House by 6:30 p.m. ET on the day of expiration, are automatically exercised into expiring cash-settled futures, which settle to the SOQ calculated the morning of the 3rd Friday of the contract month.

Please read the CME's E-MINI S&P 500 OPTIONS - CONTRACT SPECS at the following website;

https://www.cmegroup.com/trading/eq....html?optionProductId=138#optionProductId=138

 

[Same Lazy Element]

The Weekly, Weekly Monday, Weekly Wednesday and End Of Month /ES options are European Style exercisable only on expiration day. The Quarterly /ES Options (December expired last Friday) are American Style options which can be exercised until 6:30 p.m. ET on any business day the option is traded.

European options which are in-the-money on the last day of trading are automatically exercised. A 4:00 p.m. ET price fixing based on the weighted average traded price fixing (symbol ESF) of the E-mini S&P 500 futures in the last 30 seconds of trading on expiration day (3:59:30 p.m.-4:00:00 p.m. ET) will be used to determine which options are in-the-money. Contrarian instructions are prohibited.

An American option exercise results in a position in the underlying cash-settled futures contract. In-the-money options, in the absence of contrarian instructions delivered to the Clearing House by 6:30 p.m. ET on the day of expiration, are automatically exercised into expiring cash-settled futures, which settle to the SOQ calculated the morning of the 3rd Friday of the contract month.

Please read the CME's E-MINI S&P 500 OPTIONS - CONTRACT SPECS at the following website;

https://www.cmegroup.com/trading/eq....html?optionProductId=138#optionProductId=138

You right and I am wrong, I got it backwards. This said, American feature hardly ever matters (unless funding goes totally bezerk) so one can safely consider them all European options.

 

[Same Lazy Element]

I think assignment is inevitable in the event of black swan market crash.

Two questions (a) Why would you expect anyone to early-X an option in event of a crash and forego the residual premium (I have seen that exactly once in my life in very specific circumstances)? (b) Why would you think that assignment is bad for you?

 

[B Lucci]

You right and I am wrong, I got it backwards. This said, American feature hardly ever matters (unless funding goes totally bezerk) so one can safely consider them all European options.

I try not to get things backward but occasionally miscalculate and do so anyway.

And you're right about the American expirations at least for the /ES options.

Best