Futures expiration and IB

Discussion in 'Retail Brokers' started by Circle, Jun 17, 2007.

  1. Circle


    Its' been a while since I posted. I hope some members can help me here.

    Has anyone ever let their futures positions expire at IB? (ER2 or other GLOBEX index futures).

    IB says it liquidates positions. If the positions are liquidated only after expiration, does IB close positions based on the last traded values as published by the CME or any random price.

    Thanks for the help.

  2. I'm sure someone else will have a more accurate answer, but just to get you some fast info, I'm pretty sure IB won't let you hold a position into expiry. I think they will force liquidation at least a couple days before contract expires.

  3. Hm, i never let a contract expire, but from when ive read and experienced is that IB will send me warnings to close out contracts for physically settled futures (eg crude oil), otherwise they will close them out on my behalf.

    Ive never gotten a warning on ER2.
    I thought index futures were cash settled. Also i read that settlement price for equity futures was the price of the underlying index at settlement time, not the last traded futures price.
  4. Pure random. ER2 closed out on me at 1173.4, but they closed out ES on me at 48.25. Easy come, easy go...:(
  5. Magna

    Magna Administrator

  6. Circle


    Thanks guys.

    IB did not give me any warnings, and so I held it to close, thinking that the futures should settle the same as the underlying cash index close.
    So ER2 should have settled at 848. But hey, IB did me a great favor and closed at 855, and ripped $6k from my account.
  7. It's odd that IB doesn't permit delivery.
    Makes me wonder whether I have a contract
    or just an entry on IB's books :eek:
  8. I wonder who shot JFK, who's buried in Grants Tomb, and whats going on in Roswell..

    Never dawned on my to wonder about whether IB was booking my bets.

  9. def

    def Interactive Brokers

    Cash settled contracts will be marked at the OFFICIAL settlement price on the exchange. ER2 settles on the AM price following the last trading day. Thus the difference in the mark which went against you. In short, IB didn't "rip" anything from your account - not understanding the settlement procedure put you at the whims of the opening print.

    This is from the CME web site:
    Last Day of Trading Rule The business day immediately preceding the day of determination of the Final Settlement Price (normally, the Thursday prior to the 3rd Friday of the contract month).

  10. def

    def Interactive Brokers

    ER2 is cash settled - there is no delivery. As for other contracts, we are under the assumption that most of our clients down want to end up nor have the margin to end up with a box car of corn or other commodities.
    #10     Jun 17, 2007