capitalspreads said:
Steve
we know very well the settlement proceedure.... and before you say nobody can lean on the settlement price in the case of exchange fixings I would draw your attention to option expiry fixings on the Dow, FTSE and S&P over the past year. Some of which have been odd to say the least. Not only that but the change by the CME in the settlement criteria forces a change by us.
Actually we were not 'turned over' on Monday. But the point is that we could have been and the events on Monday brought this anomaly to my attention. The real reason for the change is that we have nobody here at 10.00 in the evening and we must settle our markets. I find it difficult to understand any objection to us closing the market at the last traded price of the evening and in the end the settlement criteria for 'our' market is really up to us, we are not the CME, I would also respectfully suggest that the 'last traded price' is a much more transparent futures settlement price than some calculated average which is not available to the average punter. And in reality it would be difficult to defend to a client who lost money over the settlement as to why it had suddenly jerked one way or the other.
We are also considering taking out the 'Auction' period from the FTSE and DAX settlement as well.
Jyde
as you have found our charts are based on our bid.
fhb
bollinger bands color is a bit dull I will see what can be done.
Can someone tell me what CCI is. If it is based on volume then we will be unable to add it as this information would have to come from the exchanges which is unavailable to us at this time.
Simon
Afternoon Simon, Trust all is well.
In my opinion the discussions on ‘settlement procedures’ could go on and on. We had a whole thread on the subject a couple of months back after the FTSE June expiry fiasco.
The problems as I see them are as follows.
Firstly, altering one set of settlement procedures could just be the thin end of the wedge. As you have already mentioned, you are now thinking of altering FTSE and DAX as well.
Secondly, these type of alterations catch people out. I actually got caught out on Tradindex a while back on a quarterly S&P after they settled it a week or so before it expired. It turns out that they settle it when it is no longer the front month. As a result a winning trade was curtailed several days before I wanted it closed. I phoned Tradindex and complained and as a result the expiry dates are now included in the instrument descriptions. They didn’t however replace my ‘lost’ profits!!
Thirdly, and most importantly, as an options writer I find spreadbetting very useful if I need to hedge exposed Calls and Puts which I have written. If we look back at the FTSE expiry, which we have both referred to, then dangers become all to clear. At the moment the punter knows that these instruments will expiry together and at the same price. If certain bets expire pre auction then there is a potential for unprotected exposure on a customers other dealings. Would this not potentially damage your trade as customers who use you as a ‘hedge’ would be forced elsewhere?
Fourthly, and linked into point three, is there not a risk that you might potentially lose out on new business because potential customers might be put off by your non conformity to industry norm? (Especially so if you alter Dax and FTSE). With the growing popularity of ‘digital options’ etc is there not a good chance that hedge activity could become a much larger aspect of potential trade?
I also feel certain that there are a number of points which you are missing regarding the S&P settlement on Monday.
You’ve got my number.
Steve.
