Options

[sukhen]

Sometimes, premiums of ATM options don't move even when the underlying moves. Or it's lagged - sometimes, I see even reverse direction intraday and many times, I got trapped and lost money. Any help, please. Thnx - Sukhen

 

[MTE]

Assuming you are looking at bid-ask quotes and not last trade price, then most likely it is the change in volatility.

If, on the other hand, you are looking at the last trade price, then you shouldn't do that cause you don't know when the last trade was.

 

[sukhen]

Quote from MTE:

Assuming you are looking at bid-ask quotes and not last trade price, then most likely it is the change in volatility.

If, on the other hand, you are looking at the last trade price, then you shouldn't do that cause you don't know when the last trade was.

For exits, I look at the bid only but as the index remains extremely volatile most of the time, sometimes the spread between bid and ask widen by a lot and I get caught while scalping (my brokerage is very low). Normally, I look for a small profit and looking at the bid, I try to execute at the 'market' or 'spot'. I don't blame my platform for speed but the price I sometimes get is far worse - even a profiteering trade becomes a losing one.

If I could not explain properly, kindly ask me, I'll try again.

Thnx

 

[MTE]

As I said, if you are looking at the quotes then the reason is the change in volatility. Also, you have to account for the bid-ask spread and option's delta.

 

[dmcw]

what product(s) are you trading? electronic or pit session?

 

[nazzdack]

It may help to trade those options that consistently have greater volume in order to better visualize what's happening instead of those options that trade "by appointment".

 

[sukhen]

Quote from dmcw:

what product(s) are you trading? electronic or pit session?

Index option. Electronic.

 

[sukhen]

Quote from nazzdack:

It may help to trade those options that consistently have greater volume in order to better visualize what's happening instead of those options that trade "by appointment".

I use only near strikes i.e just about ATM.

 

[dmcw]

Quote from sukhen:

Index option. Electronic.

I was just wanted to make sure you were getting a real-time, steaming bid/ask (as you would with the electronic options.) Since you've got that covered I'm not sure what to advise you. Good luck.