Are exchange traded commodity futures options marked to market, just like futures contracts? Thanks

Doesnt anyone know this, or is it that no one wants to divulge this info

The answer is no in the sense that there is no payment between the buyer and seller of the option based on the change in option price during the day (like there is for futures).The answer is a partial yes in the sense that the exchange recomputes the margin required to be put up by the option seller once a day (based on a formula that inlcudes among other things the realized vol). So it is entirely possible for the option seller that he/she is required to put up additional funds at the daily settlement time, or that funds are freed up. In other words it <is> a dynamic process, but different from the one for futures.If this does not answer it, please clarify your question.

Thanks, that does answer my question - the answer is no. I did find out that the ones traded on the IPE *are* marked to market in the futures sense.

QuoteOriginally posted by: schawla2Thanks, that does answer my question - the answer is no. I did find out that the ones traded on the IPE *are* marked to market in the futures sense.I will divide my answer in two parts. The first one, regarding aspect of pricing of a new product and another commercial.Technically there is a class a contingent claim called options with daily settlement, where buyer and seller may after each trade day receive or pay a cash flow. Another feature is that the buyer (long) won’t pay the premium in the trade day, but it will be paid along the trading day as daily settlement.This contingent claim may be priced in Black and Scholes world using the risk neutral expectation or building a replicant porftofio. Differentially of seminar paper of Black and Scholes there is no cost to construct this portfolio, so the final price of this contingent claim won’t have a discount term. Nowadays EUREX is the one Exchange where you can trade derivates contracts with this feature. I have studied this topic recently and I have interest in keep talking about it.My apologize for my English mistakesAll the Best