Greetings from Turkey, we have recently started offering Options on futures and I am having some hard time explaining to my clients why they should place margins for LONG options positions. They mainly trade OTC options and they only pay the premium while buying options. I have been told that this due to the fact that those are on futures and been directed to CME page but could not find anything related. Some clients also says that some broker like SAXO do not ask for margins. I really appreciate if someone enlightens me on that.
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Margins on Futures Options
- Thread starter UMA1980
- Start date
Long options on futures require the full purchase price upfront, anywhere. The question doesn't even really make sense, even accounting for the potential language barrier?Greetings from Turkey, we have recently started offering Options on futures and I am having some hard time explaining to my clients why they should place margins for LONG options positions. They mainly trade OTC options and they only pay the premium while buying options. I have been told that this due to the fact that those are on futures and been directed to CME page but could not find anything related. Some clients also says that some broker like SAXO do not ask for margins. I really appreciate if someone enlightens me on that.
Actually, there are exchanges out there that treat futures options as deferred premium - i.e. you post some initial margin against the premium, not the full amount and true-up daily (same way you'd do with a futures).Long options on futures require the full purchase price upfront, anywhere.
Really? Seems like double leveraging. Any U.S. exchanges do this?Actually, there are exchanges out there that treat futures options as deferred premium - i.e. you post some initial margin against the premium, not the full amount and true-up daily (same way you'd do with a futures).
Welcome back, BTW!
Yes, this what I am saying. Is CME one of them? On that case, it is not double margining?Actually, there are exchanges out there that treat futures options as deferred premium - i.e. you post some initial margin against the premium, not the full amount and true-up daily (same way you'd do with a futures).
I stand corrected and learned something new, thanks!From memory, I think Eurex works like this for Bund futures options.