Brent options

Any thought out there why Brent options aren't shown/available on IB? I have no problems with the underlying (COIL), just don't see the options.
 
Quote from heech:

Any thought out there why Brent options aren't shown/available on IB? I have no problems with the underlying (COIL), just don't see the options.
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IB replies, and simply says they aren't offered at this time.
 
Quote from ogarbitrage:

CL options (product code LC) are European if I remember correctly and typically traded electronically. American (LO) and Asian (AO) options are typically traded OTC via voice brokers or on the floor.

To move size, participants still need to go to the floor.
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Thanks for your answer.

IB only offers access to CL electronic options...
But that's about 20% of volume with spreads at least 1% of option value...
And according to your answer...
80% of volume is floor based LO options with tighter spreads for bigger players.
 
I bow to ogarbitrages expertise when it comes to what the big players do...

But I can assure you spreads in pit is not tighter. I execute both in the pit and electronically, and LO spreads are tightest on the screen. They are a little blown out right now, but a 2-3 cent spread is typical. I often fill 50-60 lot front month strangles on the screen for a better fill than what I get quoted in the pit.

Now if I was doing 200-1000 lots at a time.... Maybe that's a different story.
 
oga implied LO options are not traded electronically, only pit...
With IB I only have access to CL options...
LO does not even come up in the IB Symbol Guide.

I don't care American/European...
But whether spread is $0.03 or $0.05 makes BIG difference...
I think most non-Pros completely underestimate the REAL COST of option spreads...
Only the Market Makers make money on options long term...
Regardless of what people claim.
 
Quote from DeeDeeTwo:

oga implied LO options are not traded electronically, only pit...
With IB I only have access to CL options...
LO does not even come up in the IB Symbol Guide.

I don't care American/European...
But whether spread is $0.03 or $0.05 makes BIG difference...
I think most non-Pros completely underestimate the REAL COST of option spreads...
Only the Market Makers make money on options long term...
Regardless of what people claim.
More...

Sorry for the implication. LOs are OTC and electronic.

When trades are done on the floor, they are rarely done live - structures usually consist of a cross against the futures. Trades of this nature are volatility trades and not directional.

If wide spreads are a product of a volatile non-static hedge, then laying the structure against a specific future price with an agreed upon delta allows for a tighter spread and more fluid transactions. To my knowledge, laying options against the futures is not available on IB.
 
Interesting, and that makes a lot of sense. Currently, I try to put on delta neutral trades, since that's the only way I've found to get a decent quote from the MMs... even via RFQ. The approach you're talking about seems very interesting.

Look forward to getting larger in size and doing some business with you in the long run.
 
IB volume display for CL options is same as these links...
So it's all probably the same...
And most the volume is way out-of-the-money.

http://futures.tradingcharts.com/marketquotes/CL.html

http://futures.tradingcharts.com/marketquotes/CL.html

It's hard to view these as "liquid"...
When the May 105 call + put volume = 350 contracts...
Versus CLK1 volume of 220,000.

As a scalper it would be nice to hedge against $2-3 moves...
But unless one build's Market Maker infrastructure for these options...
And actually captures a piece of the bid-ask spread...
They will bleed you dry.

Scalping unhedged is more profitable anyway...
If you have other income streams...
And can live with the variance.
 
a 2 cent spread is not alot the front 3 months are pretty liquid u need to cross some bid offer to put on any position. most of the time it is made 1 cent around theo value if 1 cent entry exit cost is gonna make a trade unprofitable even over time it isnt worth doing most mm blow up bc they get stuck with bad positions from making markets theres not enough juice in the front few months for the mm to straight arb it so they wind up turning it into some type of spread or butterfly leaving them with 1000s of lots or options and a ton of different strikes. all to pick up 1 tic doesnt seem worth it all the edge is in the back months for option mm where bid ask is wider
 
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