Book Open/Close Trades for Options on Futures without Variation Margin

In the Open and Close Options panel, you can manually book an open (buy) and close (sell) trade for an option on a future without variation margin. This applies to an option on a future where the security has the Premium Type field set to Notional Cost and the Variation Margin field set to No. The trade's Future Expense/Capitalize Flag field determines how commissions and fees are treated. This procedure can also apply to an option on a future where the security has the Premium Type field set to Cost. The system handles both full and partial terminations.

This article assumes you are familiar with the entity and security level elections that have been made for processing an option on a future without variation margin. For example, you must enter a value for the Net Option Positions field. If you set this field to Yes, you can only open (buy) the option long. The short positions are represented by negative quantities. The transaction elections are buy and sell. If you set this field to No, you can open (buy) the option either long or short and the contracts are displayed as positive numbers. The transaction elections are buy, write, sell, and buy to cover. Also, you must enter a value for the Expiration Delay Days field. If there is no value, the system automatically expires the option on the expiration date, preventing entry of an exercise trade on that date. You can access these fields using the Create/Edit Entity panel.

To manually book an open/close trade for an option on a future without variation margin:

1. In the Accounting Center, in the left navigation pane, click Transactions > Trades > Book Trade/Rebook Trade > Book Trade.
   You see the Book Trade workspace.

2. Complete the options in the Search Details pane and click Search.
   You see the search results based on the criteria you selected.

3. Select the row with the security you want to trade.

4. On the Book Trade tab, in the Actions group, click Action Rules, point to Open or Close, and then click (Buy) Option without Variation Margin or (Sell) Option without Variation Margin.
   You see the Open and Close Options panel.

5. Complete the fields on the Open and Close Options panel.

6. Click Submit.
   Once the trade is booked, it follows all core accounting processes. The system uses the core cost tags to store the notional cost values at the position, open, and close Cost object levels for futures.