OEX market makers

For some reason Roncer cannot understand that there are not particular market makers for certain strikes. Even in equities this is not so.

Market makers in equities are designated, and make the market in all option classes and all strikes (Each exchange assigns a MM firm)

There are not certain market makers for different strikes. Your brokers rep calls out your bid or ask in the pit, and the MMs respond. Any MMs can respond, not certain ones.

In regards to fill problems, imagine this scenario : Suppose you are trading SPX, and you put in a sell order for an option that has a delta of 50. Well the MM might not be inclined to post a bid for the option because he's hedging with SP, which has a delta of 250. Now if you were buying 5 contracts, it would be easy to hedge, and we have a different story. Food for thought..
 
Hey thegazelle,

OK everything I am saying is because I don't know. I only want to know. IF what you are saying is correct as chiguy previously stated a view similar to yours, then why is there this consistency in that certain contracts preform well posting in a couple of seconds and filling your order rapidly, while others consistently have very long lag times? This is what I don't understand. And I have been trading for about 20 years. Anyway hey thanks for commenting. :D
 
Quote from MTE:

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.
More...

MTE says it best. Even if you don't use TOS as your broker, do yourself a favor and go here :

http://www.thinkorswim.com/tos/displayPage.tos?webpage=onlineSeminar

Sort by date, and go to 10/25 . Penny pricing and index options. Its free to download and it should help you understand better. The first part of the chat is spent on penny pricing, but the bulk of it is on the OEX/XEO. Hope that helps.


I've been listening to these puppies every day in the car on my hour + drive to work. Nothing like starting your morning fresh with an explantion on VIX options :)
 
Quote from roncer:

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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Roncer,

I honestly believe the fast consistent OEX options
(like OEYPK today) execute fast and consistent mostly because of "Volume."
Lets look at your options today and the volume each had:
Option.....Volume
OEYDJ..........301
OEYDI..........218
OEYDK.......1660
OEYPE.......1287
OEYPK.......2134

If you notice your best performing option (OEYPK) had
7 times the volume that your worst performing option (OEYDJ).

Just like in trading stocks, volume is important.


Jeff
 
jeffalvinson,

Really funny.... I am just now talking with my wife and saying "I need to find out what the volume on these contracts is as that may be telling." And here is your revealing post. Yeah it sure seems that volume is a factor. DJ was no longer near at the money as the market moved up so much yesterday however I think you have nailed a very important part of what's happening. Many thanks. :)
 
jeffalvinson,

Where do you get your volume data? I trade with IB and they don't supply any volume information that I am aware of.
 
jeffalvinson,

Thanks .........still searching at the CBOE........is membership needed to get the volume on the OEX options?
 
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