I have a long ES future contract. I am also short on a call option on the ES ITM future. I am at IB. Will the call be exercised automatically. This will close my position if I understand correctly.
the short call will be assigned automatically if you have cash, not sure they will sell your long call to covered but they should if your cash balance is not enough. assignments are a thing that can’t be predicted, sometimes got early assignments.
ES is euro-style. The OP’s stuff will be assigned automatically if ITM (against his long) so no position.
Thank you I leave my call which will be exercised because itm on 12/20/24. The future contract will be sold against the call and I will have no more positions. The future contract also ends on 12/20/24. I hope the exercise time will be before the end of the future contract. Sorry for my English but I am French.
When you soled the Call on ES " did IB recognized that it was a "Covered Call" position? from the point of view of Margin For 1 Long Es overnight the margin is 13K+ For 1 Short CAll ATM after that what was the additional margin?
it is “covered” in the sense that additional margin is not significant but one must manage 2 positions separately.
Ok but what was the total margin when you added soled call? and when you say "one must manage 2 positions separately" it indicates that the soled cal is considered Naked?
covered trades will probably ask for few hundred bucks more, assuming your short strike is above the long entry price. it is not "naked" if you have enough cash to take the assingnment, aka, assigned short into 2 long es positions.
So essentially unlike Covered calls on Stock and Stock options the CC on Futures + Futures options are not treated same way... both pre execution and post execution of both legs ( assuming no portfolio margin) it is not naked but it is not treated as covered either! weird