Execution
Execution of option orders is the same as with shares, see notes to shares.
Long positions (buying options)
As shares. See additional rules below.
Going short (selling options)
The margin, which is used as cover for the positions, is calculated as follows:
Calls
- If you own the shares of which you’re selling calls, they act as cover per 100 shares.
- With no or to little shares in portfolio, the margin is calculated using the following formula:
Uncovered written call option: m =% (Pa + (2S-E))
× m = margin
· Pa = Ask price of option
·% Coverageratio = (0.20)
⋅ S = Share
· E = exercise price option
Puts
Written Put Option: m = (Pa +% (2E-S))
× m = margin
· Pa = Ask price of option
·% Coverageratio = (0.20)
⋅ S = Share
· E = exercise price option
Combination orders
Combinations such as strangles, straddles, spreads, etc. are possible in the Option Competition, but are not recognized as a combination by the game engine. You are not able to enter combination orders, you must construct the desired combination by yourself.
15 total transactions in shares and / or options
For each portfolio it is allowed to executre 15 transactions per day. A transaction may consist of several partial executions, but this is counted as one transaction.
Transaction costs options
All transactions are associated with transaction costs that are calculated as follows: 4.20 euro per traded contract with no maximum.
Liability
The NIC can not be held liable for damages allegedly resulting from malfunctioning of the underlying systems. In case of failure the NIC will do everything to correct the portfolios and the rankings. This could mean that certain transactions will be reversed.
