Independent Option trader

[Stymie]

The best market to trade as a part time investor would be the Asian time zone which is your evening. Korea has the highest futures liquidity by far and Hong Kong provides fair execution on futures and options on futures pricing for the index. These are both electronic venues with one exchange so liquidity is focused in one place and liquidity providers cant take advantage of you.
Japan used to be the largest but not as correlated.

 

[Cisco34]

The best market to trade as a part time investor would be the Asian time zone which is your evening. Korea has the highest futures liquidity by far and Hong Kong provides fair execution on futures and options on futures pricing for the index. These are both electronic venues with one exchange so liquidity is focused in one place and liquidity providers cant take advantage of you.
Japan used to be the largest but not as correlated.

I've heard anecdotally that in the past, market makers were less sophisticated and there were more arbitrage opportunities to exploit mispriced options. Any truth to that?

 

[Robert Morse]

I've heard anecdotally that in the past, market makers were less sophisticated and there were more arbitrage opportunities to exploit mispriced options. Any truth to that?

If you mean the 80's maybe, after electronic trading, no. I was a MM from 1985 to 2010. We knew what we were doing but the mispricing of the options were made possible by single listing, slow order flow-we were faster- and less knowledge by off floor traders. I'd leg into reverse/conversions all day. Why would I want the markets to have more efficiency when that was my edge. There were times in Apple when we were buying calls 1 point over parity, selling stock short while there was a large 1.00 bid in the puts, and we would leave it there, because customers were lifting the 1 1/16 offer all day. Keep in mind that interest rates were well over 10% back then on short stock so this was very profitable to do. My monthly short stock rebates in the 80's were basically my P/L.

 

[Windlesham1]

I'd love to hear more if you want to share, even privately. Those returns are hard to get unless your account is very small and you are using a lot of your margin.

I trade FTSE index options -everything else in the UK is utter crap! Check out our site aimed at a gentle approach for newbies-http://optionsinvesting.co.uk best regards, W1

 

[Stymie]

I've heard anecdotally that in the past, market makers were less sophisticated and there were more arbitrage opportunities to exploit mispriced options. Any truth to that?

In the 1980s, it was open outcry and I could get the edge by being inside the pit. Customer orders were flashed into the pit from a desk and that manual process provided the edge for us. But that didn't stop many traders from blowing up when News came out!
The electronic markets today are fragmented ( 1 option/ multiple exchanges) and this gives the edge once again to the market maker and computers. Your order only goes to 1 exchange not 10.