KOSPI 200 Futures - Traders

siki13 · Jun 2, 2011

Quote from Rationalize:

That the spreads will gradually destroy you, like anywhere else.

Charts work just as well as anywhere else, and, thatâs not a positive statement.

Market Makers love Korea.

So IF i understand you correctly , i have bid ask(or some other options name) prices like in futures but you`r telling me that in spite of the huge volume spread is wide.
How much ticks are we talking about compared to a daily range?

Rationalize · Jun 2, 2011

Quote from siki13:

So IF i understand you correctly , i have bid ask(or some other options name) prices like in futures but you`r telling me that in spite of the huge volume spread is wide.
How much ticks are we talking about compared to a daily range?

I think you're looking at it backwards.

RedDuke · Jun 2, 2011

Actually the spread on Kospi options on the most traded ones is often one tick. This is one of few options in the world that can be traded like futures. I think I have seen a thread here that is titled, "trade Kospi options like futures".

dkjk · Jun 2, 2011

I don't think there is a huge spread on KOSPI options.
As RedDuke mentioned above, most of strikes are traded at 1 tick spread.

woodark · Jul 5, 2011

hi,dkjk,
I heard korean trading kospi commissions are very low.Can you introduce to us the commissions if trading via brokerage in korea.IB(interactivebrokers)kospi option commissions are too high i thought.

Quote from dkjk:

Hi guys,

I am working at one of the brokerage houses in Korea.

Post any questions here and I will try my best to answer.

BTW KOSPI Futures is a great product but comparing to KOSPI Options, Futures is a joke. Well it's my personal opinion though.

cheers

dkjk · Jul 5, 2011

Quote from woodark:

hi,dkjk,
I heard korean trading kospi commissions are very low.Can you introduce to us the commissions if trading via brokerage in korea.IB(interactivebrokers)kospi option commissions are too high i thought.

it really depends.

normal rate is as below

kospi Futures : 0.003%
options : 0.1%

but if you have some volume (DMA or HFT customers) commission can be much cheaper than you can imagine.

Rationalize · Jul 6, 2011

Quote from dkjk:

I don't think there is a huge spread on KOSPI options.
As RedDuke mentioned above, most of strikes are traded at 1 tick spread.

Right .. so, 1 tick divided by a small premuim = a wide spread.

I'll assume you're not a dick .. but rather that you're exclusively trading deep in the money .. which is the only way your comment would be correct.

woodark · Jul 7, 2011

Compare with IB,options commissions only half of it.But why do few of foreign traders open account in native korea brokerage.

Quote from dkjk:

it really depends.

normal rate is as below

kospi Futures : 0.003%
options : 0.1%

but if you have some volume (DMA or HFT customers) commission can be much cheaper than you can imagine.

lejmorro · Jul 14, 2011

Having traded K200 index options extensively on IB, I agree with dkjk that spreads are very good and the liquidity is unbeatable.

But watch out on expiry day. The 10-minute auction when retail trading is closed at the end of the day can kill you! The worst was last November when the settlement price was 3% lower than the low of the day! The only safe policy is to close everything before retail trading stops at 2.50pm Korean time.

However, dkjk, I am intrigued by the possibility of trading K200 options directly with a Korean brokerage. Is there one that provides an electronic platform with all the smarts to foreigners?

dkjk · Jul 14, 2011

Quote from lejmorro:

Having traded K200 index options extensively on IB, I agree with dkjk that spreads are very good and the liquidity is unbeatable.

But watch out on expiry day. The 10-minute auction when retail trading is closed at the end of the day can kill you! The worst was last November when the settlement price was 3% lower than the low of the day! The only safe policy is to close everything before retail trading stops at 2.50pm Korean time.

However, dkjk, I am intrigued by the possibility of trading K200 options directly with a Korean brokerage. Is there one that provides an electronic platform with all the smarts to foreigners?

Most of brokers are providing electronic platform and we are providing the English version as well. I don't think getting platform is a problem but opening a new account is.

If you don't do short-sell, then it won't be a problem but if you do, I don't know how IB calculates the margin, usually brokers charge more margin for foreigners unless foreigners meet some certain level of investor requirements.