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Futures Close-Out Policy


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  #1 (permalink)
Mestor
Salamanca/Spain
 
Posts: 3 since Mar 2017
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I am starting to get interested in trading seasonal spreads and I have seen in some software that the purchase dates of a spread are close to the expirations

I have tried from interactive brokers to buy a spread and I see that it does not allow me to do so due to Futures Close-Out Policy

My purchase date is later than what is allowed

Does anyone know what alternative I have to solve this problem?

Thank you very much and have a nice day

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  #2 (permalink)
 
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 SMCJB 
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Mestor View Post
I am starting to get interested in trading seasonal spreads and I have seen in some software that the purchase dates of a spread are close to the expirations

That's very surprising. In my limited experience the spread recommendation services tend to be months before expiry. Can you give an example?

Mestor View Post
I have tried from interactive brokers to buy a spread and I see that it does not allow me to do so due to Futures Close-Out Policy

My purchase date is later than what is allowed

Retail focused brokers will often force you out of prompt physical (as opposed to financially settled) contracts quite early. Professional/Institutional focused brokers not at all. Much of this is probably a function of whether the broker has the ability to go to delivery or not.
With Advantage several days before expiry or 1st delivery I will start getting automated messages notifying me of the pending expiry/delivery risk. If I still have a position on the day of expiration/day before 1st delivery date risk will email me to ask my plans.

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  #3 (permalink)
Mestor
Salamanca/Spain
 
Posts: 3 since Mar 2017
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Thank you very much for your help, I have been researching these days and I found that I was doing it wrong.

I see that when deciding on a spread operation I must look at the most distant maturities to avoid having this problem.

As some say with months before expiration.

Have a nice day

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Last Updated on March 10, 2024


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