How are ES (S&P500 mini futures) settled? Interactive Brokers.
- Thread starter lownetworthpers
- Start date
You're probably thinking of cash forex. With forex, there is no organized/regulated exchange, and the broker is the counterparty. IB and a few other brokers lay off the risk at a trading venue such as Idealpro, so they don't lose when you win. That's much better for you (and for them).
IB is a futures commission merchant (FCM), and all futures trading, such as ES, is fully regulated. There is no bucketing with futures.
so, if I buy several futures contracts, and keep it for a while, and have luck and goes in my direction, .....
Is pl daily physically settled to my account ?
Not really interested in nightmare scenario when I ask for withdrawal, I get no response which can be case with bucket shops :eek:
is IB clearer as well ?
I don't know what IB's clearing arrangement is. But I believe their size and reputation are a big advantage. Peterffy has a lot of wealth tied up in IB, and he is not about to do anything stupid with the company (unlike Wassendorf).
Any gains you have in futures are credited daily. If you have gains on December 31st, they are taxable in that year even if you give them back later. That can bite you.
I have never heard of anybody having trouble getting their money into or out of IB as long as they are in the USA and doing everything as they should. Most complaints about IB pertain to commission rates or customer service. They may not always be the cheapest nor the most responsive. I have been using IB for 11 years now, and I complain about them from time to time. But I'm not likely to change.
ES option contracts (puts/calls) if left to expiration and in the money will be cash settled and into the futures ie..you are long the ES (if you were short the option or long the call) and short the ES (in you were short the call or long the put)...at least on the weekly's. I would be suprised if IB is different than TOS in that respect because the CME spells it out pretty clearly
http://www.cmegroup.com/trading/equ...dp500_contractSpecs_options.html#prodType=AME
it says option exercise in ITM will be settled INTO the cash futures
Stop with this nonsense and get a grip. They are the largest independent -- not bank owned -- clearing firm in the US. They have worldwide reach and execute on every major exchange across Europe, Asia, North & South America.
Learn something about this business beyond paranoia. There are many risks but none of them involve ending up taking delivery or being bucketed by IB. And please guys stop playing into his BS. Enough is enough!!!
Learn something about this business beyond paranoia. There are many risks but none of them involve ending up taking delivery or being bucketed by IB. And please guys stop playing into his BS. Enough is enough!!!
Can we stay on topic pls?
I am wondering then, since playing ES is basically playing in cash, could I use normal strategies like calender spreads for a longer dated contract?
For example, say I am long the December ES. Can I sell a high strike November call that I expect to expire OTM, and then also sell another December call (Covered) on my long ES?
But if ES rises a lot suddenly during November expiration, then I only lose the amount ITM minus premium right? All settled in cash anyway. So its fine. All of this is independent of the December contract.
In that case, whats the point of the expirations? Because ES is just 50X the S&P. Why does the expiration date even matter. Why not just have it as a continuous futures so all the liquidity is pooled together?
In commodities futures, it makes sense to have an expiration date. But for cash settled futures, what is the point then? Since I can be long the 2014 December ES, and sell a bunch of calender calls on it for all the months inbetween, even though they are calls on another contract.
I am wondering then, since playing ES is basically playing in cash, could I use normal strategies like calender spreads for a longer dated contract?
For example, say I am long the December ES. Can I sell a high strike November call that I expect to expire OTM, and then also sell another December call (Covered) on my long ES?
But if ES rises a lot suddenly during November expiration, then I only lose the amount ITM minus premium right? All settled in cash anyway. So its fine. All of this is independent of the December contract.
In that case, whats the point of the expirations? Because ES is just 50X the S&P. Why does the expiration date even matter. Why not just have it as a continuous futures so all the liquidity is pooled together?
In commodities futures, it makes sense to have an expiration date. But for cash settled futures, what is the point then? Since I can be long the 2014 December ES, and sell a bunch of calender calls on it for all the months inbetween, even though they are calls on another contract.