Options Quotes

[cbc1]

Hi every1,

Does anyone recon that when the market starts to move in your favor on the ES that the quotes / options chains don't move freely with it?

What I mean is, say I land 10 points on the ES in favor of the option then you would expect the price of the option to move freely with the chain.

For example, say the price was $5 then the market moved 10 points in favor of the option you would expect the price to move up to say $10, which is what the option chain is saying.

What I'm getting at is as an option buyer, I kinda get the feeling that when the market moves against me if feels like the option prices are moving normally against me, however when it moves in my favor they aren't moving as "freely".

I trade options here in Auz and the options prices don't do that here.

Any ideas of ways around this?

Thanks

 

[botpro]

Which broker? TD?

 

[Jones75]

Hi every1,

Does anyone recon that when the market starts to move in your favor on the ES that the quotes / options chains don't move freely with it?

What I mean is, say I land 10 points on the ES in favor of the option then you would expect the price of the option to move freely with the chain.

For example, say the price was $5 then the market moved 10 points in favor of the option you would expect the price to move up to say $10, which is what the option chain is saying.

What I'm getting at is as an option buyer, I kinda get the feeling that when the market moves against me if feels like the option prices are moving normally against me, however when it moves in my favor they aren't moving as "freely".

I trade options here in Auz and the options prices don't do that here.

Any ideas of ways around this?

Thanks

Maybe take a look at whether you're ITM, ATM or OTM. The greeks, vol, and liqidity also play a major role in options pricing.
And if all the above has been checked off, then the MM is under pressure to make more money.

 

[cbc1]

Those poor MM.

Bot the broker doesn't matter, I'm talking about the quotes from CME

 

[botpro]

Those poor MM.

Bot the broker doesn't matter, I'm talking about the quotes from CME

And you are sure about this?
I couldn't be if I go thru a broker.

 

[cbc1]

And you are sure about this?
I couldn't be if I go thru a broker.

huh?

So u mean to tell me that ur option prices are happily moving in Sync with what the chains say??hmm??with ur broker?

 

[botpro]

trading against the client with fake quotes, ie. fake orderbook... b/c quotes are not official data...
many client orders don't get passed to the market; get handled "inhouse"...

 

[AlphaRocks]

Does anyone recon that when the market starts to move in your favor on the ES that the quotes / options chains don't move freely with it?

A couple of things you might want to look into: 1. The spread, if you're buying the market you're probably overpaying for the options, try buying by joining the bid, or selling by joining the offer, or go for the mid whenever possible. 2. The change in IV for the contract, when ES moves up, IV will drop and the options premium will drop with it, and if you're long the option it may now work on your favor if you bought at a high IV, when you have high IV you want to be an option seller -- watch that Vega.

 

[cbc1]

trading against the client with fake quotes, ie. fake orderbook... b/c quotes are not official data...
many client orders don't get passed to the market; get handled "inhouse"...

Fair enough, I thought this only happened with the bucket shops.

 

[cbc1]

A couple of things you might want to look into: 1. The spread, if you're buying the market you're probably overpaying for the options, try buying by joining the bid, or selling by joining the offer, or go for the mid whenever possible. 2. The change in IV for the contract, when ES moves up, IV will drop and the options premium will drop with it, and if you're long the option it may now work on your favor if you bought at a high IV, when you have high IV you want to be an option seller -- watch that Vega.

Could I trade the VIX to offset. Feels like I'm playing on a tilted table...... which aint in my favor


I am entering the market at the mid. Lets see about entered the market more ATM, with the option going ITM with my trade.

I think in the end I need to enter my trades / perform calculations based on these expected drops.

My only distress was that I"m not used (also not happy) about doing this.