Using Interactive Brokers, I went long 1 June ES contract at 750. At the same time I wrote an April 800 call that expires today and should end up in the money by days end. Below is a suggestion I was given concerning my current situation. Does anyone know how it pertains to Interactive Brokers? "..... I don't know if you will end up with a long and a short e-mini in the same account after assignment or whether they will cancel each other out. If you don't want to pay exercise fees, you can close the positions yourself to lock in most of your profits."
Rules are rules and IB is no different than any other broker. Just call them and ask. Then you get the correct answer with no problems. 877-442-2757 Mark
I don't trade ES and may be missing something, but why would a JUNE option cancel an APRIL option that has been assigned? Mark
you said long the june contract, that sounds to me like long the june future ... that's totally logical that they cancell each other and means you don't have a clue what you are doing with these futures options ... sorry but maybe time somebody woke you up ...
unless you meant long an june option, which was totally unclear in the first place. EDIT: I see now you are not the OP. reasoning stays the same. futures only trade four months, options get settled in the futures contract, april options get settled in june futures
I wen through the process in March. First, the option expires in the money and it is automatically exercised. You will be charged a commission for the exercised option. Then you will be charged a commission for selling your existing ES contracts. You will be flat. The fee si the same as a commission and with IB, the fees/commissions are neglegible. If you close out both the ES and call, you have to pay commissions anyway. At this point, I would just leave things alone.
The expired short April 800 ES call will be exercised into short 1 ES June contract at 800, thus closing out your long ES June contract. Your profit is the call premium plus the 50 points between the ES contract cost and the strike price minus the double commissions. Your long 1 ES June contract and short 1 April 800 ES call is identical to just shorting an April 800 ES put. Just shorting an April 800 ES put would have been easier and cheaper in commissions.
IB most certainly charges for futures and futures options assignment/exercise and expiration as specified on their website. "Futures and Futures Options: Charged the futures options & futures commission. Charged fees at expiration. Bundled fees are charged even if the customer has elected unbundled schedule." That bundled fees part really sucks.