market making

jenek-cowboy · Feb 1, 2008

hello.I am trader from Russia. I want to make mechanical system that set a demand on buy about 5% lower than theotic price and set a demand on sell about 5% higher than theoric price in option market and if i have 2 option in position than i sell 1 future to hedge my position. Have anybody do this in american market of options????

segv · Feb 1, 2008

Quote from jenek-cowboy:

hello.I am trader from Russia. I want to make mechanical system that set a demand on buy about 5% lower than theotic price and set a demand on sell about 5% higher than theoric price in option market and if i have 2 option in position than i sell 1 future to hedge my position. Have anybody do this in american market of options????

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MTE · Feb 1, 2008

You can't have simultaneous open orders on both sides of the market at the same time. Only market makers can do that, but since you are not a market maker you cannot do that.

jenek-cowboy · Feb 1, 2008

Quote from MTE:

You can't have simultaneous open orders on both sides of the market at the same time. Only market makers can do that, but since you are not a market maker you cannot do that.

Why not??? I can do this in Russia..But if it is reaaly true that you say i can try buying two options and create sinthetic stredlle and after that i can set a demand on sell in same time..

MTE · Feb 1, 2008

Quote from jenek-cowboy:

Why not??? I can do this in Russia..But if it is reaaly true that you say i can try buying two options and create sinthetic stredlle and after that i can set a demand on sell in same time..

As I said, it's a market maker's privilege. Not sure what you are proposing here. Mind elaborating or giving an example!?

blackjack007 · Feb 1, 2008

Quote from MTE:

You can't have simultaneous open orders on both sides of the market at the same time. Only market makers can do that, but since you are not a market maker you cannot do that.

yes you can.

you just have to know how to do it

jenek-cowboy · Feb 1, 2008

Quote from blackjack007:

yes you can.

you just have to know how to do it

for examle..For RIH8 call 200000. It theory price is 4005..I set my demand on buy by 3950(two option)...That i buy it i sell one future to hedge the position. After that i set daman on buy at 4050 ...And if i sell the option i start buying a RIH8...

riskfreetrading · Feb 1, 2008

Quote from blackjack007:

[B
you just have to know how to do it [/B]

So why you do not tell him how?

forex-forex · Feb 1, 2008

Quote from MTE:
You can't have simultaneous open orders on both sides of the market at the same time. Only market makers can do that, but since you are not a market maker you cannot do that.

Quote from blackjack007:
yes you can.
you just have to know how to do it

Quote from riskfreetrading:
So why you do not tell him how?

Have two accounts.

tower · Feb 1, 2008

Quote from blackjack007:

yes you can.

you just have to know how to do it

You can bid and ask on the same option. Market makers, however, can do this on every option. In general, non-market makers are limited as to how many markets they can quote.

market making

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