SPY Futures Settlement

Discussion in 'Order Execution' started by rock34748, Apr 16, 2010.

  1. Noob query alert...
    I previously sold SPY April Globex futures SPYJO (expire today) never considered holding till expiration until today's action... (zero liquidity in this instrument) and wondering what happens to my account if I hold till exp and settlement? I have never held anything until exp.

    Chat and phone sup with IB is long waiting... Wondered if someone could give basics. I guess my real question is if spy market is 118.8 at close do I settle at that? or because of lack of liquidity in the April futures, if last trade was 121.1 will it settle there?

    Regardless of price, I'll be flat after exp, cerrect?
  2. thoughts?
  3. Why are you trading something that you don't understand?

    Why are you trading something that has no liquidity?

    Why, why, why ???

    Exactly one contract has traded today at 119.49.

    ES futures have traded over 2.9 million contracts.

    "Settlement Procedure"

    "Physcially delivered. Final settlement is accomplished through delivery of 100 shares of the S&P 500 Depositary Receipts ETF."
  4. +1 to what jeb said. If you are short, you will have a short position in 100 * # of contracts you are sort (in the ETF). If you do not want that, you need to be long those many ETFs by the end of the day - then they will offset each other and you will be flat.

    see cme linky
  5. I deserve the shots. There is no reason why... only stupidity. Thanks for link and explanations. Funny my buy price of 119.62 never triggered but I see the 119.49 you mentioned now. And now we're on our way back up and 119.60's would have been just fine with me compared to previous week prices. Anyway, I'll learn from it...

    Part of reasoning is account is IRA without leverage so 100 SPY in a futures method was attractive as compared to the actual because of 3 day holding and unable to short the stock itself etc... I considered the wide spread reasonable commission... but not now.
  6. Worked out OK. I am now short the spy shares @119.83 Considerably better than the 121.10 it was stuck at when I was trying to dump the futures before exp. So even with a gap up on Monday which I'm not sure will happen anyway... I should be better than if I'd dumped on Wed or Thu. Of course I shouldn't have shorted the up trend anyway, but this was supposed to be a hedge. Lucky so far, but lesson learnt.