Market-on-Close (MOC) for Options

S

ShortBoca

Does anyone have any experience using MOCs for options? Are the fills terrible? On the sells are you getting filled at the bid, and the buys at the offer? I've heard horror stories, but they're literally from 10 years ago. Does it fill at 4pm or 4:15? Does exchange matter?

Thinking about sending a bunch of one contracts orders and seeing what happens.

Thanks in advance for any info.
 
  • The bid/ask definitely widens as the market closes.
  • Market orders most likely will be filled at the bid/ask.
  • I assume at 4:00pm - even for the options that trade to 4:15pm such as SPY and QQQ.
 
ShortBoca said:
Does anyone have any experience using MOCs for options? Are the fills terrible? On the sells are you getting filled at the bid, and the buys at the offer? I've heard horror stories, but they're literally from 10 years ago. Does it fill at 4pm or 4:15? Does exchange matter?

Thinking about sending a bunch of one contracts orders and seeing what happens.

Thanks in advance for any info.
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NEVER, EVER, EVER use MOC (or MOO) orders for options. You can get very bad fills, they might not wait until the close, but close to it. Exit yourself manually.
 
Market Order types (MOC or MOO) are ALWAYS filled against the opposite limit. And since you don't know what will be the limits at the close.....run away from them...
 
Think of telling a group of professional traders "you can close this anywhere you want". Robert Morse is spot on. A good fill is luck and a bad fill is deserved.
 
+good luck asking your broker how it will be executed. It will either be held on a server and executed at the market within 5 min of the close or held by a MM that will execute it the same way with his friends. Never, ever!
 
Market makers filling option orders play all sorts of games even with limit orders. This has happened to me multiple times. You have a sell order for XYZ $50.00 Calls, 3 contracts and you have limit order to sell it at $4.50. Current Bid is $4.00, Current Asked is $5.00. Then, suddenly, Current Bid is dropped to $2.00 and Asked is maybe, dropped to $4.50. In such cases, I cancel my order. You know it is not going to get filled. Market maker trying to capture a few desperate sellers trying to get out. The next day, the same options will be much higher because now, they have to sell those cheap options they got!
 
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