Friday, December 2, 2011

How long does options on futures last?

And does the options price adjust to zero as the futures mark-to-market every day?|||yes, this is on daily basic for more information get the advice for it broker .|||There are no general rules regarding how long a short sale can last before being closed out. A short sale is a transaction in which shares of a company are borrowed by an investor and sold on the market. The investor is required to return these shares to the lender at some point in the future. The lender of the shares has the ability to request that the shares be returned at any time, with minimal notice. In this event, the short sale investor is required to return the shares to the lender regardless of whether it causes the investor a gain or a loss on his or her trade.





However, requests to return shares are rare, as the lender of the shares is a brokerage firm that has a large inventory of stock. The brokerage firm is providing a service to investors; if it were to call shares to be returned often, investors would be less likely to use that firm. Furthermore, brokerage firms benefit greatly from short sales through interest and commissions on the trades. And there is limited risk for the brokerage firms due to the restrictive margin rules on short sales.

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