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Hi Wes,
If you have never done this before it would be in your best interest to do
a substantial amount of home work on options. First, do you have a good
reason for wanting to use this strategy? What are you trying to accomplish?
You have a limited potential profit with this strategy and unlimited risk.
I'd look a little closer at this trade before jumping on it. By the way,
March bond options expire in February (2/21), one month ahead of the bonds.
Regards,
Tom
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> From: wes blake <amerskin@xxxxxxxxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Options on Futures
> Date: Tuesday, January 06, 1998 11:28 AM
>
> Hello,
>
> I was wandering if someone could explain to me what happens in this
> situation. If I buy one futures contract on March T-BOND @ 122.00 and
> sell a March call option 122.00. Can someone tell me what happens to the
> futures contract and the option. Does the option expire at the same time
> the futures contract expires, or does the option expire first.
>
> I want to sell some options on futures and I have done it and never had
> to cover it, I have sold before that point, but I'm not so sure what
> happens near the end of month with options and futures.
>
> Thanks,
>
> Wes
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