Newbie on Options on Futures

[TheDude 10]

Hi,

 

I used to trade options professionally almost 12 years ago now, and am looking at them again.

 

I used to trade them on European listed fixed income futures, and I was marked to market every settlement. i.e. it was exactly like the underlying futures.

 

However, and this is my question, I understand that on American listed options on Futures (in my case CME and some CBoT stuff), they are settled like equities. Is this right?

 

ie I buy 1x British Pound Dec 11 1.6500 call for 0.10. at $6.25 a tick, I will see my account $625 lighter to cover the full value of that purchase. The fact they settled at 0.14 makes no difference. If I sell the call the next day for 0.12, I will see the $625 + $12.50 (ie 2 ticks) hit my account. When I was marked to market, I'd only see the debit/credit difference of the options from where I traded them and the settle - or the previous settle to todays settle if I was holding.

 

Thanks,

 

Dude