interactive brokers question

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whenim64

I have been using interactive brokers for my trading and for the second time they are not providing a bid or ask for a heating oil option that i am holding.

it's deep in the money 2.93 put that expires on the 26th but i can't liquidate it. is this a broker issue or something i am not aware of that's normal? how can i close this position without bid or ask?
 
If you must liquidate instead of buying a future and then exercising... deep itm options aren't typically quoted unless there are resting orders. What's the call worth of the same strike and expiration? Add that to the in the money amount of the put and there's your offer (assuming you're long the put), minus a tick or two. If not filled, a bid should appear as soon as you place your offer.
 
whenim64 said:
I have been using interactive brokers for my trading and for the second time they are not providing a bid or ask for a heating oil option that i am holding.

it's deep in the money 2.93 put that expires on the 26th but i can't liquidate it. is this a broker issue or something i am not aware of that's normal? how can i close this position without bid or ask?
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This sounds like a broker issue, but is possible that in that crowd there are no electronic markets for that strike. You can still enter an order at the value you wish to sell it at. Or, you can ask if IB has a futures execution desk where they can go to the crowd and get you a bid. Most FCMs have 24 hour trading desk that could have helped you with this.

1245
 
Care to share what exact contract you're talking about?

This might not be a broker issue but a market issue. This is one of the risks you face when trading options or any market with low liquidity. Its called liquidity risk. Even if it is a profit position, if there are noone on that end you're stuck with it. Most people don't realize this.

If I had a position like that, I would just calculate the intrinsic value, and put a closing order in and see if some participant will take the other side of the trade. Otherwise I could also just buy shares, and then exercise the put option to close it out.
 
That is certainly an options. whenim64 could just sell futures against your long calls and when your option is exercised, it will be offset with the future.

1245
 
On 2/4/2014 I sold 3 contracts of a Sept 78/75 bull put spread on BND for .47/.17 . Since that time my transaction has been the only transaction recorded against those options.

http://finance.yahoo.com/q/op?s=BND&m=2014-09

So that, six months later, my current profit and loss (as shown on my OptionsXpress account) on that spread is Zero.

I don't remember how long I waited to execute the original trade but it was probably a few days.

That's what you call illiquid.

I have put that spread up to close several times but had no takers. The spread will expire next month so being short the spread I will finally be credited with a couple of bucks.

It is indeed possible to have so little interest in an option that no bids appear for a long, long time.
 
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