He could have a CashAcct, ie. all own funds only. But one should not forget the commission: $0.65 per contract... That's $650k commission for 1m contracts, unless one gets better commission rates from the broker.
@Drawdown Addict, FYI: options writers like watching options contracts expire worthless... Since it means to keep the full credit received.
Hmm. I doubt you can replicate this in the real market, b/c the moment such a big order comes in, the price rises (for a buy order) or falls (for a sell order), ie. the Bid/Ask spread widens... In your sim account, did you use a limit order or a market order? You have to ask yourself this serious question: which MarketMaker is willing to take your offer? And there is usually just one MM, or just a few... The MM dictates the prices...
i have a benchmark for people that are starting out - if you can't trade 1 position, 1 contract profitable, how then can you expect to trade multiples? numbers should be used to improve a working method not create a method.
That's good. But it's clear that the used simulator is not that realistic for such big orders, IMO. In such tests you better should be very conservative, ie. be on the safe side...