Random Questions

C

CBC

Hey ETs.

As I'm sure with every1 I have some questions about stuff that comes up during trading.

I'm an option trader.

My first question is regarding ETFs, because there is so much SPY chatter here on ET including options.

Exactly what is the go with general trading? When you enter a trade what exactly happens? Is there a margin? Do you pay the whole amount ($630) or whatever the heck it is :confused:?

Thanks,

Also when you execute an option anytime b4 expiry, what exactly happens? Do you get your underlying straight away? Like instantly or does it take a few minutes or 1/2 hour.

Also what exactly happens when there is auto execute... where does CME get the futures contracts from considering its the weekend? They can't just add say 5000 Buy side futures with no1 on the other side... Are exercised puts matched with calls or something?

Thanks.
 
This thread question is a whole bunch of messy gibberish o_O :confused:

I'm not sure where exactly to begin and end. -- You sound dumb/new...if that's the case, then read basic finance websites on how options work...then paper trade in your mind...then Jump in with real money,

and be wise and clever quickly on what's unfolding,
 
Last edited:
lawrence-lugar said:
This thread question is a whole bunch of messy gibberish o_O :confused:
More...

I'm not dumb / new Lawrence. I've never traded or looked into ETFs. I wanted to know these simple question instead of piling through a tonne of pds just to get a simple question answered. People show up here all the time with basic questions about futures and I am the same regarding ETFs.

Secondly I've been trading options for a long time and never executed so I wanted to know the second question because if I needed to execute for some emergency reason (CHF or something) then I know whats going to happen.

Just wondering. I'm suprised you all said this.
 
CBC said:
I'm not dumb / new Lawrence. I've never traded or looked into ETFs. I wanted to know these simple question instead of piling through a tonne of pds just to get a simple question answered. People show up here all the time with basic questions about futures and I am the same regarding ETFs.

Secondly I've been trading options for a long time and never executed so I wanted to know the second question because if I needed to execute for some emergency reason (CHF or something) then I know whats going to happen.

Just wondering. I'm suprised you all said this.
More...

Most likely it is St. Patrick's Day, and Friday, we all started early with the green beer and shots.
Then the Irish wedding in the evening and we really ripped, so we can't answer any bloody questions.

 
CBC said:
Hey ETs.

As I'm sure with every1 I have some questions about stuff that comes up during trading.

I'm an option trader.

My first question is regarding ETFs, because there is so much SPY chatter here on ET including options.

Exactly what is the go with general trading? When you enter a trade what exactly happens? Is there a margin? Do you pay the whole amount ($630) or whatever the heck it is :confused:?

Thanks,

Also when you execute an option anytime b4 expiry, what exactly happens? Do you get your underlying straight away? Like instantly or does it take a few minutes or 1/2 hour.

Also what exactly happens when there is auto execute... where does CME get the futures contracts from considering its the weekend? They can't just add say 5000 Buy side futures with no1 on the other side... Are exercised puts matched with calls or something?

Thanks.
More...

OMG the hangover from yesterday, no am too old to have random questions during trading as I just a monkey with a mouse, you do the same things all day long, and why buddy is programming the system so I can drink more.

I trades long/swing stocks now-just added swings recently, options for profits either spreads or short options, long term commodities/hedged and will hedge open profits now, 60 minute and scalping/day trading. So I get extra drink for this, burp.

What is "go"? ETFs are like shares in stocks, so if price is 200.00, that is for one share, if you want 100 shares it is 100 times 200.00= $20,000

When you have questions, you ever try google?
http://finance.zacks.com/execute-call-option-6226.html
good site with side articles

No trading till Sunday last afternoon and if there is no one take other side, you don't get filled, you can leave it in and watch price of underlying as you don't want to take lose by buying or selling too cheap or expensive.
 
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CBC said:
Hey ETs.

As I'm sure with every1 I have some questions about stuff that comes up during trading.

I'm an option trader.

My first question is regarding ETFs, because there is so much SPY chatter here on ET including options.

Exactly what is the go with general trading? When you enter a trade what exactly happens? Is there a margin? Do you pay the whole amount ($630) or whatever the heck it is :confused:?

Thanks,

Also when you execute an option anytime b4 expiry, what exactly happens? Do you get your underlying straight away? Like instantly or does it take a few minutes or 1/2 hour.

Also what exactly happens when there is auto execute... where does CME get the futures contracts from considering its the weekend? They can't just add say 5000 Buy side futures with no1 on the other side... Are exercised puts matched with calls or something?

Thanks.
More...
I don't view your questions as entirely gibberish. Actually good questions too for a new options trader like me (only traded options since 2013).

First of all you are right, ETF operates more like index mutual funds than closed-end stock funds or stocks, i.e., I don't think the share sizes are fixed but grow or shrink according to how many folks buy or sell. But I don't think that affects options at all since options are derivatives (side bets), only the ETF prices do.

When you exercise the option, if it is a call, you should be prepared to buy the ETF shares at the strike price you bought. If it is a put, you should be prepared to sell the ETF shares at the strike price you bought. If you are short, it is the reverse. There are exchange rules that define the settlement terms, commissions... You need to have the funds (or margins) if you exercise to buy and have the stocks if you exercise to sell, etc.

If your calls/puts are in the money and at expiration if you do not take action, your brokerage will exercise for you and send you the proceed as if you exercise and sell the underlying.

If it is not correct, guys are welcome to correct me. We are here because we want to learn to be better traders.

Regards,
 
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