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Date/Time: Tue, 23 Apr 2024 02:09:11 +0000



Post From: disconnect

[2021-12-23 16:00:22]
User753428 - Posts: 158
And regarding using CQG for options and Asian exchanges, this is clearly stated at post #4 here:
New Teton Order Routing Service for CME, CBOT, NYMEX, COMEX, FairX, upcoming EUREX

I just read what you guys wrote about why options trading is not supported in Teton Order Routing service and it makes sense. Margin requirements become complex when short options esp. in multiple legs is involved.

But why not just support buying options only? i.e. Buying calls or buying puts.

There is absolutely no margin calculation involved as it's just a debit to your account. If you buy a ES call/put option that's currently worth $1, the only step involved is a debit of $1 * $50 ES multiplier = $50. That's it. You don't even need to worry about margin because your max loss is just this premium ($50) you paid to buy the call/put option.

From your perspective as software developer, technically it's actually much more simple than futures b/c with futures, there's different margin requirements for each type of futures and you also have to worry about auto-liquidation when there's a substantial drawdown and futures margin requirements can't be met.

But when you're just buying calls or buying puts, it's literally just a debit (worth the option's premium) to your account balance. It doesn't get more simple that that. And this is why AMP Futures broker allows options trading but only buying options because there's no margin involved and there's no risk to the trader/broker/clearing firm as the max loss is just the premium you pay for the option.