TWS realtime exercise blow off margin

Discussion in 'Trading Software' started by NoMoreOptions, Apr 13, 2004.

  1. Now TWS supports realtime exercise. Do it mean you may also get assigned in realtime? If so, wouldn't it very likely your margins gotta blow off, position liquidated in worse cases to your dealer's bargain? Gee, this world just gets more complicated.
  2. alanm


    What makes you think you can get assigned in real time (just because it specifically mentions being able to exercise in real-time - a totally separate process)? Do you know anything about how assignments are allocated (hint: by the OCC)? Why would you accuse IB of taking advantage of that, even if it was possible?

    What makes you think that IB would violate all sorts of marketplace rules and laws by piercing their firewall with Timber Hill (who trades tens of thousands of contracts a day) to take your measly one-lot from you?

    Why are you posting this in the software forum?

    (Those who ask why I am answering, let alone in the software forum, have a valid point, but I just can't take it any more :( )
  3. def

    def Sponsor

    NoMore your ignorance and lack of trust is - shall I say - refreshing.

    You can exercise an option at ANY time. However, the exercise will not be processed by the OCC until that evening for the following trade date. Thus the counter party who gets assigned will not find out about it until the late evening batch processes.

    The main benefit for a retail trader to exercise early would be to free up funds to for trading.

    Given that the option to exercise early is solely up to the choice of the client, where is the hidden agenda you are seeking? The decision to offer this service was driven by client suggestion.

    Alan, just a slight correction. The figure has 6 digits.
  4. sail


    Actually, this a good reason to choose IB over firms not offering real-time

    The ability to exercise in real time could
    reduce fund requirements, and in extreme
    cases actually prevent forced liquidations.

    Assignments are a batch process (overnight) from OCC.
  5. pspr


    Just remember your name -- NO - MORE - OPTIONS!!
  6. Also, if you want to liquidate the position via stock instead of the option when it is trading at a discount to parity, you do not have to worry about borrowing the stock. Good for hard to borrow stocks.
  7. Alan, I don't know the questions to your millions of (angry) questions when I raise my own questions and doubts. But why this is in software forum? It's about a feature of TWS, a TRADING software, quite legitimate.

    Def, good to hear from you. Why I didn't see you in discussions of other TWS problems? Okay this one, 10^6 options and realtime exercise and waiting OCC batch daily assignments, isn't I(T)B assume some risks, which in theory may blow you off the business if some odd realtime exercise going on? Why do you want to do this for customer requests? Okay let's say you do a good job and assume manageable risks, but why don't you do a better job and assume much less risk to override stupid PDT rules?

    I still think realtime exercise may just blow off margins, in many ways. I am not going to let that happen. I am not going to let some freak optionists f'ing around and caps the whole boat. I am going to write to NASD, SEC, OCC, and others to ask about this.
  8. Nordic


    Dr Mr Nomo,

    Please don't stop trading options. You are indeed a good options trader. Keep at it and encourage your friends and family to trade them also.


    traders on the other side of your trade
  9. def

    def Sponsor

    After the above post, I think nordic has it right.

    You keep raising concerns where there are none. Please tell me (coherently please) what risks are there in how IB handles realtime option exercise. Before you give the folk at the NASD, SEC, OCC and others a good laugh, please take a look at the rules and regulations as well as the CBOE web site.
  10. Nordic


    Take your medication and keep trading those options.
    #10     Apr 14, 2004