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Newbie eCBOT question
- Thread starter nravo
- Start date
Devin Brady
ET Sponsor
When trading grain options you might consider working with a broker that can get the bid/ask directly from the floor.
I am a senior market strategist at Global Futures and offer clients superior service without giving up low execution costs.
Devin Brady
dbrady@globalfutures.com
877-367-3177 X109
I am a senior market strategist at Global Futures and offer clients superior service without giving up low execution costs.
Devin Brady
dbrady@globalfutures.com
877-367-3177 X109
Quote from nravo:
I'm using interactive brokers and trying to get bid/asks on ZC and ZW options and -- nothing. I could RFQ, I guess. But is this the way it always is? No volume? Not much movement in the e-futures, either. Or are there odd trading hours or is this a holiday or something?
Literally 95% plus of grain options volume is still open outcry. FWI: Grains close at 1:15 cst
Quote from Pa(b)st Prime:
Literally 95% plus of grain options volume is still open outcry. FWI: Grains close at 1:15 cst
Why are grains options mostly open outcry when the futures are now vast majority electronic? Will they switch over to more electronic, too?
Volume data from CME:
http://www.cmegroup.com/daily_bulletin/preliminary_voi/VOIREPORT.pdf
Yeah, it's still a drag trading options on futures as you really are limited to maybe six to eight contracts in the US, if you include FX futures and Stock Index futures, that have any decent liquidity. The futures are developing, slowly. But it takes years to get a market going in options futures. It will happen, but it's going to take a couple more years. The dinosaurs are still in charge. But we all know how that plays out.
Most agricultural options will remain pit trading for the coming few years. The majority of floor traders in options make their living as delta neutral arbitrage traders. They are willing to make markets on many strikes of various months and then hedge these trades immediately in the futures market. The ability to make multiple markets that constantly are sensitive to the flux of the underlying market can not be done easily on the electronic format at this point. This means open outcry in the pit options will remain until the technology catches up on this front. These traders provide the liquidity we need to trade options with a decent b/a spread.