This chapter covers the mechanics that turn a futures or options position into a live obligation: performance bonds, premiums, price limits, delivery, exercise, and assignment.
What You'll Learn
| Unit | Focus |
|---|---|
| Margin Requirements | Initial, maintenance, hedge, and spread margin |
| Options Premiums | Intrinsic value, time value, delta, and quotations |
| Price Limits | Limit moves, expanded limits, lock limits, and circuit breakers |
| Offsetting Contracts and Delivery | Closing, notices, delivery, warehouse receipts, and EFPs |
| Options Exercise and Assignment | Assignment, post-exercise margin, and expiration dates |
Chapter Strategy
Keep three distinctions clear: futures margin is a performance bond, a market order prioritizes execution rather than price, and exercise of an option on futures produces a futures position rather than stock.