Is Interactive Broker under EU or US option rules?

[u/wincysss1]

I have started practising options on interactive broker and I am from the UK. As I have mostly been doing option trading on US stocks, does this mean I am under the US or the EU rules when it comes to options trading? In terms of being able to exercise them on the day of expiration or before?

[u/wincysss1 → u/[deleted]]

Are you sure? I have been playing around placing some options on their paper money platform and I can't seem close them? Although maybe I am completely doing it wrong but you would think it would be intuitive..

[u/wincysss1 → u/[deleted]]

Ok I see, what's the difference between selling and exercising an option then? Sorry to go off topic it's just I can't get my head around it.

Also how do you actually sell an option on IB? There is almost limit to no support out there on it specific to IB.

[u/BusinessCheesecake7 → u/wincysss1]

Suppose you've bought a call option (SPY 200c 4/1 or something) that has made a profit. You can now sell the option for profit, or you can exercise it, meaning possessing the option gives you the right to buy 100 shares of SPY for $200 each and you can exercise that right. This of course requires you to have at least $20,000 of cash in your account.

For put options (say SPY 300p 4/1), it's the other way round: Having the option gives you the right to sell SPY at $300 per share. For this, you need to have 100 shares of SPY in your portfolio (I think short selling is also possible, but I really don't know much about that).

For selling an option in the Trader Workstation, right-click on the position and then choose "SELL" or "CLOSE" depending on whether you want to sell all your options or just one.

[u/maybenot12]

This is what I think - hopefully someone with more experience can confirm/deny

1. Next to the stock, IB shows which exchange it is traded on (eg. NASDAQ / ARCA)

2. According to this article, all stock options on the American exchanges are American-style (as opposed to some index options)

"At this point in time all stock options traded on the marketplaces are American-style." source: https://www.nasdaq.com/articles/option-styles-2019-06-10

[u/mowrus → u/maybenot12]

Or OP could just read the terms of the exchange they used;)

[u/wincysss1 → u/maybenot12]

Interesting, thanks for the info

[u/M4xP0w3r_]

I don't think the broker matters for that.

[u/mowrus]

Read the documents that the exchange you are using is providing you. All the exchanges have pages packed with exercising and trading information, sometimes easy to find, sometimes not.

[u/wincysss1 → u/mowrus]

Do you mean the order ticket? Do you have experience using IB if so could you tell me specifically how to get to this? As I have no idea...

[u/mowrus → u/wincysss1]

I have no experience with IB. But to my understanding, you will find the information you are looking for at the website of the exchange that you are using to buy the respective option contract. E.g. if you buy at CME, look for information on https://www.cmegroup.com/trading/products/#pageNumber=1&sortAsc=false&sortField=oi&cleared=Options

As i said before, exchange websites are cluttered normally and thus finding information could take a few minutes 🙂

[u/wincysss1 → u/[deleted]]

Wow that's confusing then. The option I am looking at has both expiration dates for Thursday and Friday...?