Experienced option traders, did you run into situation not being able to sell your options?

[ironchef]

My preference is to trade static delta and Long vol. if not a market maker, my preference is to be Long options with no margin calls. Lock in profits with most liquid contract.

I understand long vol but what is trade static delta? Did you mean not adjust delta/delta hedge after you placed a trade?

Thanks.

 

[viruscore1]

doesn't matter what the greeks say. If there isn't any open interest on the buy side aka bid is zero, your sell order will not be filled.

 

[ironchef]

doesn't matter what the greeks say. If there isn't any open interest on the buy side aka bid is zero, your sell order will not be filled.

Please correct me if I am wrong lylec305:

Aren't Exchanges required MMs to at least post a minimum number of bid/ask as part of their job to be MMs of the underlying? Sometimes I traded very thinly traded options and don't ever remember options without posted bid/ask, some did have very wide bid/ask though.

 

[viruscore1]

Referring to OTM options, ITM the exchange (market makers) steps in, that's another discussion. If no one is buying then the bid volume is zero and no open interest on the buy side. Check the attached option chain. Notice the Bid column rows with 0 and the open interest quantity is Ask. Sell at market will not be matched and filled.

 

[Stymie]

Static delta is achieved by using the underlying product - thus you dont have to worry about adjusting your delta when the market gaps up/down.

Market makers dont have to quote markets when they feel uncomfortable doing so. The commitment is different for HK and Korea. Especially Korea which is why they have the worlds deepest liquidity and most volume traded for futures/options on a single exchange - fair markets for all players in one location - no fiber connected vultures to pick you apart.

 

[ironchef]

Referring to OTM options, ITM the exchange (market makers) steps in, that's another discussion. If no one is buying then the bid volume is zero and no open interest on the buy side. Check the attached option chain. Notice the Bid column rows with 0 and the open interest quantity is Ask. Sell at market will not be matched and filled.

Thank you for your clarification. I have BMY and sometimes traded options around the underlying. Next time I do that I will take a careful look.

Regards,

 

[ironchef]

Static delta is achieved by using the underlying product - thus you dont have to worry about adjusting your delta when the market gaps up/down.

Market makers dont have to quote markets when they feel uncomfortable doing so. The commitment is different for HK and Korea. Especially Korea which is why they have the worlds deepest liquidity and most volume traded for futures/options on a single exchange - fair markets for all players in one location - no fiber connected vultures to pick you apart.

Thanks for correcting my misunderstanding.

 

[ironchef]

Static delta is achieved by using the underlying product - thus you don't have to worry about adjusting your delta when the market gaps up/down.

I see. You can get delta neutral either by buy/sell equivalent delta using the underlying (or future?) or buy/sell other options in the option chains to achieve delta neutral and you prefer the underlying?

 

[Sig]

doesn't matter what the greeks say. If there isn't any open interest on the buy side aka bid is zero, your sell order will not be filled.

That's actually not true, as someone pointed out already in this thread. I've often posted a sell limit order when there is no bid and had it filled, generally a minimum tick or two off intrinsic value. That's free money, there is always someone waiting to pick it off even if they don't go to the effort to post a bid.
If you're ever in such a situation and don't get filled immediately please post it here on ET. I'll be the first one to go hit your offer!

 

[viruscore1]

That's actually not true, as someone pointed out already in this thread. I've often posted a sell limit order when there is no bid and had it filled, generally a minimum tick or two off intrinsic value. That's free money, there is always someone waiting to pick it off even if they don't go to the effort to post a bid.
If you're ever in such a situation and don't get filled immediately please post it here on ET. I'll be the first one to go hit your offer!

happens all the time, that's how it works. I programmed matching for clearing house. The only time a sell gets filled is thru a buyer (bid). Although you may not see it, for every matched sell there is a buyer. The buyer that picked it off, is the buyer aka bid.