Futures fungibility/scaling out

Discussion in 'Financial Futures' started by erlewine, May 4, 2004.

  1. Maybe someone can answer this question - if I'm long 1 June pit (big) S&P 500 contract and then scale out of the position using 5 June e-minis, how do brokers treat the resulting position? Will my margin requirements drop to zero, and can I just keep it open until the contracts expire without wasting money on commissions and slippage to reverse it?

    To throw a wrench into this, does it make any difference if the commodity is non cash-settled i.e. long 1 big soybean contract, short 2 mini beans (or whatever the ratio is to make my delta 0).

  2. nitro


    The ES and SP are fungable. I do not know about the commodities.

    But look, call your broker and make sure of all their ins and out. I would never trust something like that to anything that did not come directly from the horses mouth.

  3. I remember that for the ES/SP, margin will be 0, but, your broker will likely carry 2 positions. You will probably have to phone your brokers to offset these.