ZN trading over Interactivebrokers

Discussion in 'Financial Futures' started by futbee, Aug 28, 2003.

  1. futbee



    I've a problem to go long in the ZN U3. IB told me, I can't go long only 3 days before the first notice day. I can't understand the logic of this rule. Is the september contract not possible to trade at this time.

  2. sammybea


    Discount brokers sometimes makes up for their cheap commish by hiring people with sub-standard logic. How they got Def is beyond me. He should have cut his losses long ago and go with Goldman.
  3. def

    def Sponsor

    thanks, but the person who you claim has the sub-standard logic happens to be the founder and chairman of the interactive Brokers Group. people have derided his logic for years and look where it got us. we're now the largest option specialist (maybe the world) and are one of the top 25 largest securities firms in the states. I think he's doing a wee bit better than any member at Goldman and don't worry about me - I'm fairly certain that I've no losses to cut.

    read steve's comment on the policy on another post. it's all about controlling risk. i also mentioned that I would bring up the issue.
  4. sammybea


    def its nothing personal against you or the founder. I retract my statement. Its just frustrating and i thank you for taking up the issue at least.
  5. futbee


    And how can/must I trade the ZN with IB?
  6. you will have to wait for the rollover unless you want to trade the Dec. contract which is still a little thin. You can still short Sep. tho.
  7. Sounds like a reasonable risk control since they probably don't want to deal with people accidentally getting caught long and unable to take delivery.

    def - you could maybe allow taking long positions if the account has enough equity to take delivery in case they don't get flat in time.

    Or maybe have a mandatory liquidate at market if they've still got a long position on drop dead day.
  8. futbee


    thanks for the answers
  9. Wipe Out

    Wipe Out

    Can someone explain this taking delivery stuff? I don't trade bonds yet, but may in the future. How can you get caught long? What do I do to avoid getting caught? What is the delivery? lol

  10. You'll probably want to do some more research on futures before actually trading them.

    Non-cash settled futures ultimately involve physical delivery of the underlying commodity if you don't offset or roll in time.

    If you're long going into the first notice period you can be tagged to take delivery of the physical - which will usually involve a lot more than you'll want to deal with (want to pick up 42,000 gallons of gasoline at New York Harbor?) and cost a whole lot more than the comparatively small margin you're used to (if I recall correctly each ZN contract converts to something like a $50,000 note).

    IB doesn't want to deal with anyone having to take delivery (and potentially IB being on the hook when some dumb ass forgets to offset), so they're blocking new long positions 3 days ahead of notice as a precaution. They could presumably just do automatic liquidation at market the night before notice.
    #10     Aug 28, 2003