Buying/Selling Options

daytrader85 · Dec 21, 2006

Quote from smilingsynic:

If you cancel an ORDER for an option, IB can access a fee. IB is merely passing on the cost to its custoimers, who cancelled the order in the first place.

Yes, but if you just change the price, they don't charge anything.

pcgeek86 · Dec 21, 2006

Oh ok, didn't realize it was that simple. Thanks for the clarification. Regardless, $.10 isn't exactly that much ...

El OchoCinco · Dec 21, 2006

Other brokers do not pass on the cancellation charge though...

Quote from smilingsynic:

If you cancel an ORDER for an option, IB can access a fee. IB is merely passing on the cost to its custoimers, who cancelled the order in the first place.

smilingsynic · Dec 21, 2006

Quote from optioncoach:

Other brokers do not pass on the cancellation charge though...

Yes, and often their commissions are higher!

El OchoCinco · Dec 21, 2006

Well true but not so much cheaper. OX and TOS will give you $1.25 a contract if you do at least 10 so for volume it is close. Slightly more than IB but if cancel orders enough times it adds up. I tend to place a lot of spread orders to try and get filled and if I get no fill and the market moves I cancel them. At least for me those cancels would add up lol..

Quote from smilingsynic:

Yes, and often their commissions are higher!

pcgeek86 · Dec 21, 2006

I was just doing some research on options, and noticed the ETFs seem to have strike prices that increment by $1 instead of $2.50. I guess I would probably need to understand ETFs better in order to understand why this is, but does anyone have a quick answer?

MTE · Dec 21, 2006

Quote from pcgeek86:

I was just doing some research on options, and noticed the ETFs seem to have strike prices that increment by $1 instead of $2.50. I guess I would probably need to understand ETFs better in order to understand why this is, but does anyone have a quick answer?

The reason that most stocks have strike increments of 2.5, 5 and etc is because there's not enough liquidity to warrant lower increments, with ETFs, on the other hand, the demand for options is high hence the liquidity is high and therefore it becomes feasible to have strike price increments of 1.

pcgeek86 · Dec 21, 2006

Thank you, MTE

daytrader85 · Dec 21, 2006

Quote from MTE:

The reason that most stocks have strike increments of 2.5, 5 and etc is because there's not enough liquidity to warrant lower increments, with ETFs, on the other hand, the demand for options is high hence the liquidity is high and therefore it becomes feasible to have strike price increments of 1.

I've wondered that too, thanks!

daddy'sboy · Dec 27, 2006

Quote from Maverick74:

And you should be embarrassed for recommending that crap $500 book on collars.

I've heard from quite a large number of traders (many claiming to have made/are making good money using the strategy) that Lord's book on collars and dynamic hedging is excellent (albeit a little more expensive than your average options text). It's been described as a very practical, step-by-step guide on how to trade collars/married puts.
Have you read it?
If so, why do you think it's 'crap'?
Cheers
daddy's boy