Value Collector
Have courage, and be kind.
- Joined
- 13 January 2014
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Yep, all true.i agree that there are ways to work around it, but they'll likely be more inconvenient than if the lot sizes were all 100 to begin with. one might not want to roll all the way out to dec (i normally prefer to roll out a month, two tops, as i like the faster decay of the shorter dated stuff - not saying that's the best way to do it, it's just my own preference) so copping the lot size differential may be unavoidable.
rolling as two separate legs runs the risk of slippage. may or may not turn out to be a big deal in the end, but ideally one shouldn't have to be concerned about slippage when rolling.
in theory you could punch in a combo order with some wacky ratio to try and avoid the slippage, eg. if you have 50 of the 100 lot size contracts and you want to roll to 46 of the 107 lot size contracts (covering 4,922 units of underlying) you could try punching in a combo with a 25:23 ratio. i don't know the inner mechanics of combo orders as well as @cutz does though, so i'm not sure if such a combo would actually get filled - i've only ever booked combos with "standard'ish" ratios eg. 1:2, 2:3, 1:3.
BHP has something similar, it has the odd option chain with 104 lot sizes. these days i just avoid those chains, even if it means i don't get the quicker decay by having to sell longer dated contracts that do have the 100 lot size, i just find it more convenient in practice to run positions off a consistent 100 lot size. YMMV.