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  • new_millenium_profits new_millenium_profits Oct 21, 2006 6:08 PM Flag

    At least 5M shares from Options will be assigned today at $110


    A third dynamic not mentioned in any of my posts is the futures market where there are single stock futures. RIMM1C is the symbol for single stock futures. Currently there is not much of a market for Single Stock Futures, but right now all contract months RIMM has a total of 985 contracts open interest which include 24 contracts for Oct 06 delivery.

    For the single stock futures, the largest open interest is for Dec 06 delivery. Currently I can sell RIMM futures for Dec 06 delivery at $110.90. If I sell those contracts, the people who buy them are obligated to take delivery of stock from me on the futures contract expiration. At the current spread, I can short the future contract for $110.90 per share and buy the stock at the current $110 price and I have locked in profit of $0.90 per share. I just have to hold the stock until futures contract expiration and then the holder of the contract has to take delivery.

    The big difference between a stock future and an option is the future is a guaranteed sale at a specific price for future delivery. The person long the future contract will have to take delivery of the stock at the agreed to price and the seller of the future contract will have to deliver the stock at the agreed to price.

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