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| Work with a real person.
There is alot going on and at least it is someone that can double check what you want to do. I dont mean strategy but just general execution. I hear they will go side by side with options on electronic and pit just like futures. With electronic, there is no second chance. It is done. Lets say you want to buy 490 puts at 30 and mistakenly enter 480's at 30. The 480's may actually be 25 but you will be filled at 30. Your broker may say "I see the 480's are at 25"..... things like that they can catch if they are good. Right there in that example is $500 on your 10000 bu.
Also, the way you describe the follow through is NOT what happens. Let's say you have a 480 put and corn is at 380 on expiration. The put will be worth $1.00. If you leave it on you will be short futures at $4.80. Not bad if the market is $3.80 and heading down, but a bad surprise if corn goes limit up (I am hearing now 30 cents) for 4 days. Now you are the lucky recipent of a margin call. You need to exit the position prior to expiration unless long calls are worthless. Short calls that are worthless will expire and you keep the value but my rule of thumb has been 2 cents and I am buying back that short.
Cheaper is not always better. | |
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Easiest/Cheap place to buy puts
