Hello All, Recently I started focusing more of my trading in futures options rather then equity options alone. My futures trading strategy usually consists of credit spreads and/or long calls/puts. My question is can anyone explain the worst case scenario with letting a futures option credit spread expire ITM. I'm not in this situation but would like to know worst case. I'm assuming you incur the max loss between the spread and that is it. Am I missing anything? Thanks for you input. slb3
As with all options your worst case scenario with a long position is the entire loss of option premium. Nothing beyond that.
Most options on futures settle for the future, is if one leg is in the money, you will have a futures positions the next day. If both are, you won't.
I think OP was talking about options on futures and not spreads constructed through the purchase and/or sale of options?
"the worst case scenario with letting a futures option credit spread expire ITM" you can check your maximum risk / loss before placing any trade on your options platform doesnt matter what options you trade
Only retail platforms that are owned by the clearing broker offer this. Broker neutral professional platforms don't do this.
yes, i really wonder why.. there are some other good stand-alone options software but limited to stock/ index options lots of demand + very few vendors = pricey platform
You mean that if futures option ends up in the money today, it will be always assigned after its settlement for the day?