Off-floor strategies

C

ChrisM

It was mentioned before, but I believe, it is still actual:

Anybody makes consistent profits using off-floor strategies ? I`ve tried few of them already, with mixed results, nothing impressive. Some say there no proftable options strategies for off-floor traders. Thanks for any comments.
 
I dont have any answer but have been wondering the same thing. I would say why try to play the market makers game from off the floor. If you know the rules well enough, maybe you can take advantage of what disadvantage the mm has.

The above would be finding an edge in the relationship of different options, or an execution edge. What about using options as leverage to speculate on underlying. With enough option knowledge you could find the best strategy with the least penalty. But there probably will be some disadvantage for using the leverage, so why not just trade futures? If your good enough at speculation just buying options could be a great trade. But you have to judge the direction and the magnitude, and have very precise timing.

What type trades have you tried?
 
Originally posted by ChrisM
It was mentioned before, but I believe, it is still actual:

Anybody makes consistent profits using off-floor strategies ? I`ve tried few of them already, with mixed results, nothing impressive. Some say there no proftable options strategies for off-floor traders. Thanks for any comments.
More...

There is an obscene amount of money to be made using the market makers strategies off the floor. In fact, I don't know what other strategies could possibly make money other then floor strategies.
 
Vertical spreads - tested by myself, lower margins, but lock You in till expiration (in general obviously)
Backspreads - good for large moves
Conversions - quite interesting for locking profits in, but hard to establish "no loss" position with straddle

In one of recent "Futures" mag there is an idea of buying puts and adding bullish position when market moves down, so the cost of ATM put is covered by the profit already made, anybody traded that ?
 
Originally posted by redzuk
I dont have any answer but have been wondering the same thing. I would say why try to play the market makers game from off the floor. If you know the rules well enough, maybe you can take advantage of what disadvantage the mm has.

The above would be finding an edge in the relationship of different options, or an execution edge. What about using options as leverage to speculate on underlying. With enough option knowledge you could find the best strategy with the least penalty. But there probably will be some disadvantage for using the leverage, so why not just trade futures? If your good enough at speculation just buying options could be a great trade. But you have to judge the direction and the magnitude, and have very precise timing.

What type trades have you tried?
More...

Redzuk,

options are different, while option is 4 D creature, future contract is only 2-dimensional, that`s why complex strategies make more sense
 
If you know the rules well enough, maybe you can take advantage of what disadvantage the mm has.
More...

You could look for trades when the MMs are at lunch. Hehehe. Middle of the day is always lazy time, so, markets don't get updated very quickly. I would regularly sit in my office and call in orders that would never be filled because the markets weren't up to date. There would be some real good ones too. As a customer, you chances of getting that fill would be heck of a lot better. Unfortunately, MMs have been successfull in changing the rules in their favor.
 
As volitile as the markets are these days, I find it hard to believe any MM worth a dang lets quotes get stale while he's having a ham sandwich. More likely the quotes are fresh and the ham is a bit dated.
 
I jokingly say this, but, it still happens. If everything is on autoquote, it doesn't get stale. At least on the CBOE, where you can't eat on the floor, if your eating a ham sandwhich, you aren't trading. If the market is busy, you won't leave the floor. If there are 20 people in the crowd and half of them are gone with a few options off autoquote, traders may not jump to adjust a market when the stock had been in a .10 range for the last 30 minutes. They could could be trying to squeeze the most theoretical edge out of it when they don't have as much competition. I'm not talking about a big move, just a tick or two, but enough for a little edge. I will say this, as a customer, I couldn't say that I've benefitted from this.
 
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