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they price their options around a theoretical price. So they are buying a bit 'too low' and selling a bit "too high'

this is not true, the spread converges to zero because of intrest that diminisches over time. be certain that whenever something is starting to get out of line, big money will push it immediately back either because they will arb it or either because the side that is overvalued will be sold or...

just sell all the puts you can with your margin, you will soon find out that there really is no risk at all :D :D :D

I used to play this game (sitting on bids and offers) in the DIA-options a few years ago, was quite profitable, but when IB started asking cancellations costs this was all over. You had to be very patient (i did something like 10-15 trades each day, trading between 150-200 options) and I was...

Why would anyone who can develop this need outside investors ?:confused: :confused: :confused:

It's not just a matter of getting market maker privileges, but also of the spreads that are being used, and I'm afraid the analysis of Trajan is right on: a lot of options are priced to perfection nowadays. This would explain the fact that few locals have remained in these electronic markets...

thanks for your input, I was thinking along the same lines, that's why I started this thread in the hope of getting some feedback (not exactly what I wanted to hear but probably the most realistic scenario).

What I'm most worried about is the fact that, say something like 10 years ago, there used to be lots of locals / local-groups on the floor in Amsterdam. When I now watch the list of members of euronext (dealers) only a handfull seem to be left. In Belgium there is even not one local. This does...

sorry to dissapoint you but I'm not going to be trading those products. I live in Belgium and I used to trade DIA-options quite succesfully untill they started asking cancellation costs at IB (hedging my delta). But the result is you have no social life anymore if you do this, so this is why I...

it was possible to make some money trading options and hedging the stock before cancel fees since then it has been impossible for me.

I had allready looked there before I started this thread, so I know theoretically it can be done, but I would like to hear some practical answers from people who know a little bit more.

Has anybody done this ? Is this realistic ? can it be done ? How much money do you need ? Where can you find clearinghouses ? What can you "realisticly" expect to make ? What are the costs ? What do you need for autoquoting software ? Can you do it alone or do you need to be with a group of...

At last someone with a brain in this thread ... If you see some of these posters have over a thousand posts it says a lot about what ET has become ...

has anyone tested this system on ZN? I would be very curious to see the results. I don't however have the tools to do this myself, so if someone could give this a try ...

i allready answered this one ...

the future value of any enterprise you start should be more than it's worth today, otherwise there is no point in starting it. This implies an interest rate ... get yourself a good book on macro-economics, it takes a while but things might get clear ...

is there noone here who followed macro-economics 101 ? One currency would mean one intrest rate, this would pose big problems because intrest rates determine the pace at which the econommy grows. As you know this pace rather differs from one end to the world to the other so unless we get the...

it was a private company that has been taking over in the late nineties by a belgian bank and has been totaly restructered.

it was not only that: he also was short vol at under 10 on the belgian options index, which probably did not help his position either, but part of his strategy was to hedge his futures in france ... I know what you are saying though, but I have seen very bad things happen to people where wo...

i have known a headtrader for a desk who was trying to do the same thing with the belgian index and french index (for those not in the know, these are neighbouring countries), he added the S&P too to this kind of arb-thing from time to time. He lost about 15 million usd in a year and lost his...