ES option markets with IB ... MISSING!

Quote from Pabst:

Even more bizarre is the fact that with the recent listing of options on YM, MM's in ES face viable competition in the electronic options on index futs market . The spread on ATM opts in YM have been quoted at around 7 ticks wide. I'm not saying that the franchise on mini-index options is exactly valuable but the timing of this inaction by Globex MM's is a bit curious.
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Agreed, and you've got MMs in the YM... I have a few hundred contracts running, nice product.

riskarb
 
I have not seen 5s out there before. Early makers will mark up with 10, 20 or even 33, then 150 when the market opens and spreads tighten. I see 5s now. Today will be interesting.
 
Quote from ktm:

I have not seen 5s out there before. Early makers will mark up with 10, 20 or even 33, then 150 when the market opens and spreads tighten. I see 5s now. Today will be interesting.
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Right, checked first thing, went to 10s for a moment... I've hedged my debit in the spread. I'm comfortable with letting it run thru expiration. I actually have some long delta in YM and other contracts, but my concern was not the 28 deltas, but the debit on the spread.

Hey Def, thanks for the PM and I apologize for my comments about IB, totally misplaced. I should know the Globex product better, certainly before trading size in an electronic car with no primary MMs.

riskarb
 
I guess the few guys who make markets decided they didn't like the look of today's market. We are back to 5 on each side, with many sides non-existant and super wide spreads. If Globex ever wants this damn thing to succeed and have some liquidity, they will need to hire some MMs.

Having no one on the other side when you need them most is a giant pain in the ass. The hedging and ES/SP dealing in order to offset these positions (which cannot be closed) is a real chore.
 
Quote from alanm:

ktm: How much of a spread are you willing to pay/take?
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Depends on the market.

Yesterday morning I would have paid full price. In normal markets, I usually put two positions on at a time. I try to split both spreads on entry. Sometimes it works. Other times, I split one then just pay the entire spread on the other position in the interest of getting the spread/straddle/strangle or whatever I'm doing. If there's someone out there offering a few on the other side creating a .25 spread, I will try to hit them before the MM scoops it up.

Yesterday I had no choice but to establish ES futures positions to hedge myself until the MMs showed up around 10:50am. I understand these guys are not hired MMs per se, rather they are there to make money as I am. They have no obligation to provide liquidity. I believe the exchange ought to move to provide some form of reliable liquidity, else the volume will never rise to levels supported by speculators.
 
Basic Question:
1 SP future (large) = 5 ES (mini) future... approx = 2500 SPY (ETF)

What option contract is a hedge... SPX??
How many hedge 1 SP and 5 ES? 25??

Is SPX what you are referring to when you say the ES option on future?

Sorry to be off topic... just looking for some help on this...


:)
 
ktm: What I was after was to understand how much you were willing to give up in exchange for not having to dynamically manage a hedge. As you've said, someone's got to have a reason to want to take the other side of the trade. There seems to be little enough real order flow (currently) that you pretty much have to hedge unless you're taking a directional position (i.e. more of a trade than just neutral MMing).

qaz: Futures on Options overlie some futures contracts, like ES and YM, and trade on GLOBEX and ECBOT.
 
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