Flex Options Broker

I was allowed to do Flex trades through my Goldman account, but that was a JBO. Don't know of any pure customer brokers that will allow it.

My experience with Flex trades are that you will be giving up A LOT of edge to put it on and again to take it off (this was several years ago, could be tighter now). I think you are better off trying to deal with the listed options. Remember that even though you may see wide markets, the "inside" market will be much tighter. You may have to go with a longer expiration then you want, but edge wise you will be better off.
 
FSU said:
I was allowed to do Flex trades through my Goldman account, but that was a JBO. Don't know of any pure customer brokers that will allow it.

My experience with Flex trades are that you will be giving up A LOT of edge to put it on and again to take it off (this was several years ago, could be tighter now). I think you are better off trying to deal with the listed options. Remember that even though you may see wide markets, the "inside" market will be much tighter. You may have to go with a longer expiration then you want, but edge wise you will be better off.
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Thanks for your comment. I think flex options are becoming popular and spreads are tighter now. Some hedge funds are moving to flex options from OTC. Bill Ackman recently executed a very large flex order on VRX at a fair price.
What do you think about Convergex, Jefferies or Wells Fargo? I'm sure they do flex options. Friend of mine has a $15m fund and primes with WFC. My account is in low 7 figures but I don't intend to start my own fund. Don't wanna call them to get embarrassed. Do you know what their minimum AUM is?
 
So upon checking further, Apex, will clear a Flex trade if your introducing broker will allow it. I will PM you more information.
 
Humble Investor said:
Thanks for your comment. I think flex options are becoming popular and spreads are tighter now. Some hedge funds are moving to flex options from OTC. Bill Ackman recently executed a very large flex order on VRX at a fair price.
What do you think about Convergex, Jefferies or Wells Fargo? I'm sure they do flex options. Friend of mine has a $15m fund and primes with WFC. My account is in low 7 figures but I don't intend to start my own fund. Don't wanna call them to get embarrassed. Do you know what their minimum AUM is?
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I think you may be missing a big part of the back story on the VRX option. I'm guessing Bill didn't just wake up one morning, put a bid in for a flex option, and it was filled by a MM or random counterparty half a second later. The entire deal was probably brokered beforehand and just filled using flex to get the advantage of a cleared product vice the counterparty risk you take on an OTC option. So you need to do much more than just find a broker who does flex options, you also need to find an actual broker who will wrangle up counterparties to your desired trades. That's the much higher touch, more difficult part of the equation and I'm guessing you'll have a hard time finding anyone to do it for you unless you make it worth their while.
 
Sig said:
I think you may be missing a big part of the back story on the VRX option. I'm guessing Bill didn't just wake up one morning, put a bid in for a flex option, and it was filled by a MM or random counterparty half a second later. The entire deal was probably brokered beforehand and just filled using flex to get the advantage of a cleared product vice the counterparty risk you take on an OTC option. So you need to do much more than just find a broker who does flex options, you also need to find an actual broker who will wrangle up counterparties to your desired trades. That's the much higher touch, more difficult part of the equation and I'm guessing you'll have a hard time finding anyone to do it for you unless you make it worth their while.
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I somehwhat agree with you. he probably shopped around and negotiated given his position. But Flex options are done via CFLEX, it is all done electronically. All MMs have someone responsible for flex options. Most flex options have open interest of few hundred contracts. I think that's one of the points, It's for smaller guys who can't get an ISDA.
 
Humble Investor said:
I somehwhat agree with you. he probably shopped around and negotiated given his position. But Flex options are done via CFLEX, it is all done electronically. All MMs have someone responsible for flex options. Most flex options have open interest of few hundred contracts. I think that's one of the points, It's for smaller guys who can't get an ISDA.
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I'd love to be wrong and for that to be true. Please do report back if you have any success. I went on a failed quest like yours about a year ago but would love to be able to do flex at the low 7 figure retail as well so hope you can figure out a way to make it work.
 
FSU said:
So upon checking further, Apex, will clear a Flex trade if your introducing broker will allow it. I will PM you more information.
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FSU,

as you know, my last firm cleared Apex and they asked us not to do flex. Might have changed. They did not want any illiquid options they could not value realtime.
 
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