Think Or Swim and Options on Futures?

Would you like TOS's platform to include options on futures?

  • Yes I do!

    Votes: 39 83.0%

  • Nope, no way!

    Votes: 8 17.0%
  • Total voters
    47
Hi,

Has anyone been trading options on index futures via ThinkorSwim ?

Any good or bad experience to share ?

I noticed that SPAN has not been fully implemented. For example, there is no cross-margining.:eek:
 
moonmist
I've been dipping my toe into the water using TOS this past month. I do think you have to have a PM account for cross margning. With span I can't figure out how they are calculating margin. Basically what I've ended up doing is shorting the market with the ES futures options (sell OTM call buy OTM put) then scalping daily long on TA signals. By shorting with the futures options I can buy ES for no additional margin charge.

The only concern I have is what would happen if the Mark would go to 0 on my futures options contract, say overnight AH and my margin requirments would change drastically. The other weird thing is the drop in day trade buying power, basically nil but I have still options/stock buying power...so I haven't figured out how it really works. I've just been doing very sm number of contracts to keep me out of trouble, until I do understand it better.
 
I've traded ES and NQ with no problems at all. I see nothing wrong with their SPAN margin, I would suggest you actually learn how it works before commenting on it. As far as cross margin goes, please let me know what retail broker currently offers it.
 
Quote from RichardRimes:

moonmist
I've been dipping my toe into the water using TOS this past month. I do think you have to have a PM account for cross margning. With span I can't figure out how they are calculating margin. Basically what I've ended up doing is shorting the market with the ES futures options (sell OTM call buy OTM put) then scalping daily long on TA signals. By shorting with the futures options I can buy ES for no additional margin charge.

The only concern I have is what would happen if the Mark would go to 0 on my futures options contract, say overnight AH and my margin requirments would change drastically. The other weird thing is the drop in day trade buying power, basically nil but I have still options/stock buying power...so I haven't figured out how it really works. I've just been doing very sm number of contracts to keep me out of trouble, until I do understand it better.
More...

Hi,

Let me give you an example:

If I sell 10 contracts of ES Call ( margin requirement $10,000 ), and then sell 10 contracts of ER2 Put ( margin requirement $5,000 ), SPAN will give a total margin much less than $15,000. If memory serves, it should be around $10,000. As of Friday, my paper-trading account ( thinkDestop ) gave a margin requirement of $15,000. Most Futures Commission Merchants, eg. Global Futures/RCG, allow cross-margining among ES options, ER2 options, NQ options, etc.

Thinkorswim did tell me that this feature has been implemented at the back end, and they would have cross-margining in place for the front end in late June.

It seems that the jobs of their software developers are still safe. There is a lot of work to do.:p

Anyone else cares to share his/her experience ? :D
 
The margin tho is dynamic...your initial margin will change as you hold overnight and the greeks of your position change...at least mine do, so if you start with $10K and delta/gamma go against the postion that margin could shoot up. Of course if your selling/buying a straddle then perhaps it doesn't change all that much. dunno
edit.
just noticed your selling the ES call and ER2 put...one of the problems is ER2 you should be selling fewer contracts since its a bigger weight contract isn't it?
 
Quote from RichardRimes:

The margin tho is dynamic...your initial margin will change as you hold overnight and the greeks of your position change...at least mine do, so if you start with $10K and delta/gamma go against the postion that margin could shoot up. Of course if your selling/buying a straddle then perhaps it doesn't change all that much. dunno
More...

The above example involves ES Call and ER2 Put, not straddles or strangles.
 
right... see my edit above...again shouldn't you do it in a ratio then? If you were doing NQ's vs ES you'd sell more NQ's than ES to get a closer ratio...right?
 
Quote from RichardRimes:

right... see my edit above...again shouldn't you do it in a ratio then? If you were doing NQ's vs ES you'd sell more NQ's than ES to get a closer ratio...right?
More...

I am not sure about your question. I ***THINK*** you are referring to the multipliers:

ES options (50)
ER2 options (100)
NQ options (20)


SPAN is risk-based . Hence the margin requirement depends on the multiplier, volatility, strike price, etc.

If I sell one contract of ES Call 40 points out of money first, I can probably sell several contracts of ER2 Put 120 points out of money without increasing the SPAN margin, assuming the stock futures remain flat.
 
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