OEX market makers

roncer,

i was an oex broker for 12 years...i did only pro business...

now the issue is that customer orders don't always go to the electronic book...they go to a par electronic workstation in the crowd where a real live broker executes your order...they have to get a quote and make a physical trade to fill your ticket...input the data and send a report...hence the time lag...think about it...try typing this passage and that is about how long the actual transaction takes...

unless you are trading more than 100 contracts your order usually gets filled as fast as possible...

however some times if a broker is screwing around or on the phone your order may sit on the workstation until he gets to it...

hence the lag...this used to piss me off huge...and still does...some of these brokers are not very bright...just in the right place at the right time...
 
Roncer,

During my internship at the CBOE, I worked with an OEX marketmaker. On the floor of a pit, brokers have most of the power and are frequently the ones delaying times. Any limit order that an outsider posts should immediately show on the open book. If it does not show, it is more likely a problem with your broker than any marketmaker mishandling. Part of my job was displaying quotes for OEX weeklies, and that was 100% electronic for us with zero room to screw people.
 
chiguy and tropicalknight,

Hey thanks for posting. Great information. I trade small between 1-10 contracts typically. It just blows my mind how with a certain contract (OEYCF) I get a fill in 3 seconds and then on another contract (OEYOG) I don't know if I am filled and end up waiting as much as a minute. What a killer. So I just keep searching for the contracts where my order is posted and filled promptly. Yesterday I placed a bid at the ask and waited 30 seconds only to see my bid appear in the bid column ........and the ask vanishes .......and this asking price had posted as traded last......some 10-15 seconds after my bid was entered. And of course the market then moves convincingly in my direction and I feel robbed. So another trade missed, time to search for a different contract to work with.

So maybe a look at the weeklies might be worth a try. Thanks again you guys your knowledge is pure gold to us retailers.
 
roncer,

I battle the same exact problems you do with the OEX options everyday.
Here is my personal favorite:
I have an order placed to buy OEX options at 2.25 and
the current bid is 2.10 and the ask is 2.40 on the options that I am trying to buy.
The order sits there for several minutes without the bid or the ask changing price.
"Suddenly I am filled and the instant that I am filled they drop the bid price to 1.70 and the ask price to 2.10!!! and this happens without the actual price of the OEX index changing."
So now I have an instant drawdown created by price manipulation.


"The CBOE needs to make the OEX options market totally electronic and take it out of the hands of the bandito's."
 
""Suddenly I am filled and the instant that I am filled they drop the bid price to 1.70 and the ask price to 2.10!!! and this happens without the actual price of the OEX index changing."
So now I have an instant drawdown created by price manipulation."

Exactly why I quit trying to trade the OEX.
 
Quote from jeffalvinson:

"The CBOE needs to make the OEX options market totally electronic and take it out of the hands of the bandito's."
More...

i was unaware that there was still human involvement in the OEX. Its probably one of the last few places where being in the right place can get you a lot of money.
 
jeffalvinson,

Regarding your favorite I would try and cover ASAP and not trade this contract again as there sure seems to be a crooked fellow operating on the other end. Also it just might be helpful to post the symbols of the contract here so we could all see it and be able to avoid the bandito. If we are able to keep calling out the good and the bad contracts we may gradually improve the general transparency of the OEX.

In spite of the fairly regular monkey business that we all experience I still like these non electronic OEX's and hope that by participating in an open discussion here we may be able to help ourselves and improve the floor operations as well.
 
chiguy,

customer orders don't always go to the electronic book...they go to a par electronic workstation in the crowd where a real live broker executes your order...they have to get a quote and make a physical trade to fill your ticket...input the data and send a report...hence the time lag.

How is it that some contracts post your bid and give the fill quickly where as other contracts seem to CONSISTENTLY have a lag in time that is much longer? The differences in lag time between the different contracts I can't figure. Can you comment further?
 
Correct me if I'm wrong, but the OEX pit is where OEX options are traded, all of them, so the market makers that trade in the pit trade all OEX option contracts across the strikes and expirations, so you cannot say that one specific contract has a better market maker than some other contract. The difference may come from the fact that market makers' positions vary and some contracts may fit in some specific market maker's book better making them more likely to trade quicker.

If you daytrade OEX options and these issues have a significant impact on your profitability or your trading approach then change the product. Go to futures or options on ETFs.
 
FWIW.......trading the OEX during the last couple of days seems to reveal more consistent differences between contracts.

OEYDJ.........this one was the worst of the lot. Extremely slow even when I hit the ask with my bid. Tried it twice then deleted the dog.

OEYDI....OEYDK....OEYPE
all three seemed OK. Pretty good speed no obvious manipulation.

OEYPK..........now alright....fast, very fast consistently. Got a couple of fills today better than my limit order. Traded it about 5 different times and was satisfied on each entry and exit. So my hat is off to PK. Somebody is doing something right here.
 
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