es options

Discussion in 'Options' started by met1989, Mar 13, 2019.

  1. met1989

    met1989

    Hello
    I'm currently holding some es options which i want to hold till expiry in order to get the full profit my question is how does it work with es options cause they expire and i get assigned the es contract as well?
     
  2. Robert Morse

    Robert Morse Sponsor

    If your ES options are in the money, you will end up with a futures positions.
    https://www.cmegroup.com/trading/equity-index/us-index/e-mini-sandp500_contractSpecs_options.html

    Settlement At Expiration Option exercise results in a position in the underlying cash-settled futures contract. In-the-money options, in the absence of contrarian instructions delivered to the Clearing House by 8:00 p.m. ET on the day of expiration, are automatically exercised into expiring cash-settled futures, which settle to the SOQ calculated the morning of the 3rd Friday of the contract month.
     
  3. met1989

    met1989

    so how do i make money holding it till the end?
     
  4. Robert Morse

    Robert Morse Sponsor

    I did not say it was in your best interest to hold the call until expiration, you did. You should exit when you thing the risk-reward is no longer working for you. And, if on expire you do not want the future, close or roll your options.

    FYI-every option on future is different, You need to examine the term sheet before you trade and know the expiration date.
     
    tommcginnis likes this.
  5. met1989

    met1989

    how much will the options be worth before expiry?
     
  6. Robert Morse

    Robert Morse Sponsor

    No one can answer that right now. Your question gives me concern. These are things you should understand cold before trading.

    Good luck,
    Bob
     
    dealmaker and Handle123 like this.
  7. SumZero

    SumZero

    If your intention is basically to hold the options until expiration and have whatever profit it will be, you can put a MOC order for ES if the broker allows it.

    Let's say you have an ES call 2800 and on Friday mid afternoon ES is around 2850. You can enter a MOC order to sell an ES contract which will short ES at the close (let's say it will be 2847). This short position of 2847 will be then offset but the execution of the call 2800 which will buy a contract of ES for 2800.
    Overall you have no position and keep the profit of 47 (minus commission of the MOC). I think this is your intention.
     
    met1989 likes this.