Close out of SPX & RUT index options

Discussion in 'Options' started by bc1, Nov 17, 2011.

  1. bc1


    Hi guys. I had a good day chasing the SPX down hill with ntm bear call spreads. Finished off my buying power with a couple RUT ntm bear call trades. They are now expired worthless.

    Since Nov 11 option trading on SPX and RUT ends on Thursday (today), I just wondering when they (BXChicago/OX) will close out all my expired trades? Anyone know? I hope it doesn't go into the weekend as I'd like to trade tomorrow with the Nov 11 options having their last day. Guess I'll check in the morning.

    Also wondering which is better to use between TOS or Trade Architect? I've messed around with TOS but I probably need a 3 hour college course to learn it all. I was getting ready to open up an IRA with IB when I had the entire 5 grand together but then I got a deal with TD ameritrade for a flat $1.50 per contract and I don't have to front the entire 5 grand right now as they only need 2 grand to open it. IB is about half that but it will work for my trading for now as I don't go over 10 contracts anyway. Most are between 1 to 4.
  2. uptickk


    Can’t speak to RUT but SPX options stopped trading today but settle based upon the opening, SET, price of each component tomorrow morning.

    This is posted on CBOE’s website.

    Note that when you hold SPX to expiration you risk an overnight gap which occasionally is quite large so don’t count your chickens quite yet.

    Depending on your broker (TOS), they will release the margin for the trades after CBOE posts the SET value. One annoying thing to mention is that the CBOE doesn’t usually post these values until 11 or 12 CST and sometimes not until around 2. The excuse is that they have to wait for the opening print on each component but it doesn’t take hours for all 500 S&P components to trade. I could only imagine the increase in trading feeds the exchange and brokers would get if there was some urgency in posting the settlement values earlier so margin could be released and individuals could trade more contracts but what do I know.

    As for TOS vs Trade Architect, I have only used TOS and haven’t found anything that compares to it for option trading.

    Best of luck with the opening SET (I am holding a few positions into expiration myself).
  3. IVtrader



    you primarily only mention commission rate in your posting which tells me you might not be doing multi leg trades yet.

    as commission structure is only one factor in chosing a brokerage,things like the brokerage platform ability to set up multi leg trades, the "analytics" the platform offers, and how well they execute

    I've been using TOS for almost 2 years now and their platform is superior for offering the features I mentioned above. they have "dropped the ball" a couple of times recently with their merger/purchase by TD Ameritrade. I also use Trade Monster as a "backup"
  4. MTE


    First of all, SPX and RUT options are settled based on the final settlement value, which is calculated using the opening print of all component stocks, so until you know the settlement value you do not know whether your options have expired OTM or not. Sometimes the final settlement value can be significantly different from the Thu close value.

    As mentioned above, the SPX final settlement value is released around noon, while it sometimes takes the whole day for them to release the RUT settlement value. So I wouldn't hold my breath for getting that buying power released.
  5. bc1


    Thanks guys. Yeah I had a thousand chickens counted and now you tell me the fox is still in the hen house. Looks like the futures started down already. Most of the S&P ones are way out of the money at 1250-1280 but I have one close at 1225 and a couple RUTs at 720 which are close. Hope I don't get stuck in the rut.

    Got it on the SET price. Trading quits on Thursday, price set on Friday, expiration on Saturday, and exercise settlement day for cash is Monday.

    Kinda hoped to play the Nov close tomorrow with some little spreads but I noticed last week that the good price spreads kinda go away around 1:00 cst. Guess I'll see how it goes.

    TOS it is. I noticed from other threads that it seems to be popular. I had paper traded it for a while but quit when I opened a real account. Don't know which has a bigger learning curve, option trading or the TOS platform. Right now I'm just trading a little IRA but am opening another IRA for my daughter. It's almost too late for this old fogey but maybe I can kick in 5 grand a year and build a nest egg for my daughter.

    If I do though, I can see where it might help as I'm already getting over a dollar slippage once in a while trying to set up vertical credit spreads as I am slow. After trying to get greedy on single legging in on some paper trades and getting burned when I couldn't get the second one filled, now I just put the spread in all at once. Now with the large bid/ask spreads available, it is hard to pick a limit price except I usually take the spread from the last filled trade and adjust depending upon which way the market is slipping.
  6. bc1


    Update: S&P 500 SET finally posted it's settlement price sometime after lunch on Friday. I am well OTM on those 3 trades.

    However Russell 2000/RUT RLS didn't post it's settlement price until late Friday night at 720.35.

    I had bot 2 Nov 11 call contracts of RUT 725 and sold 2 Nov 11 calls of RUT 720 for my spread when the price was 716. It closed Thursday at 718.87 or so. Then it apparently gapped open on Friday to 720.22 but they ended up with the 720.35.

    I supposed the institutions had a bunch of 720 puts or something so they bot futures to drive the price up or whatever their strategy was.

    Anyway my broker hasn't settled my accounts yet. My breakeven on the 720/725 call credit spread was 721.26 so I will see how it goes. Since they don't have stock to exercise with these indicies then I assume they will take .35 (times 200) plus any brokerage fees. Still leaves me with a profit on the trade.

    Since I started this thread, I'll post back with final results on Monday or whenever they settle with me.

    Thanks for the help. Next time around I'll have to allow for gap ups when picking my strikes.
  7. bc1


    The broker hasn't closed all my OTM expired positions yet but I did find a transaction on the activity list. Sometime on Friday there was a BTC for the two 720 RUT calls for .35 plus one broker commission of 12.95. Total cost for the 720 option expiring in the money at 720.35 was $82.95 but with the initial credit I still ended up with a profit of .90 or $180 for the two contracts. Thanks for the help.
  8. ammo


    if the market is not slipping,take the mid between bid /ask on each option to arrive at a fair price for your entry