iron condor on SPX vs NDX

A

adamchubb

have you been trading iron condor on both of the indices???? (i mean index option, not ETF option). For SPX iron condor, i find it quite difficult to get out, when the spread become deep out-of-money, say, with a delta of less than 4 for the short option. Some deep OTM options are actually quite illiquid, some options with no turnover at all.

I haven't traded NDX iron condor before. I wonder if it's easy to close out deep OTM spread without giving up too much slippage.
 
I trade both and sometimes it may be a bit harder to get a fill on the SPX as it has wider spreads, but overall I can't say that it's a big problem.
 
Quote from adamchubb:

have you been trading iron condor on both of the indices???? (i mean index option, not ETF option). For SPX iron condor, i find it quite difficult to get out, when the spread become deep out-of-money, say, with a delta of less than 4 for the short option. Some deep OTM options are actually quite illiquid, some options with no turnover at all.

I haven't traded NDX iron condor before. I wonder if it's easy to close out deep OTM spread without giving up too much slippage.
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Get a broker that has floor access. Then send the order and give a little bit of edge on the order, and the broker will fill it. If not, at least you will get feedback on how much edge you have to give, but usually it is not terrible.

I believe IB has floor access in the SPX options pit.
 
the etf's have tighter markets. especially when compared to looking at the SPX which doesn't have a true electronic access.

or pick strikes that have a great open interest and are thus slightly more likely to trade.
 
I agree the SPX has more slippage than NDX. RUT is the best of all. Yes, the ETFs are quite liquid, but for condors, this may be too commission-intensive.
 
Quote from tomk96:

the etf's have tighter markets. especially when compared to looking at the SPX which doesn't have a true electronic access.

or pick strikes that have a great open interest and are thus slightly more likely to trade.
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It has nothing to do with electronics. The ES options have the same problem. In fact, because there is floor access, this is easier to resolve than in a puarely electronic market.
 
Quote from nitro:

It has nothing to do with electronics. The ES options have the same problem. In fact, because there is floor access, this is easier to resolve than in a puarely electronic market.
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there is floor access to the etfs too. the etfs trade in .01 increments. in spy terms vs the spx, it's essentially .10, but probably still tighter than the screen markets. the spx isn't open for all market makers to stream their markets, unlike the etfs, which have many market makers and multiple exchanges. for what it sounds like he is doing, he should look at the difference he would save in just lifting the b/a on a tight mkt, but have to do it 10x more (or including comm.) vs what you need to give up in the cash index and pay the lower comm.
 
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