Short selling at the Chicago Stock Exchange

[Robert Morse]

It was common to have that strategy. The specialist in front of me once told me, "If I sell an option at 1/16 (yes, a long a time ago) and it goes to $1.00 and expires worthless, it was a good trade". That worked better in the 70s, 80's and 90's when options were typical over priced, as most customers bought options. With new margin rules from clearing firms today, not sure if you can still do that and option prices are more efficient now.

Selling options?

 

[MarkBrown]

It was common to have that strategy. The specialist in front of me once told me, "If I sell an option at 1/16 (yes, a long a time ago) and it goes to $1.00 and expires worthless, it was a good trade". That worked better in the 70s, 80's and 90's when options were typical over priced, as most customers bought options. With new margin rules from clearing firms today, not sure if you can still do that and option prices are more efficient now.

picking up pennies in front of a steam roller

or

risking your house to gain a bicycle

gain by an inordinate amount of risk - embrace the risk

someone had to sell those flex options to the banks for the weekend...

 

[poopy]

don't trade options myself just as you know i was the computer guru for the worlds largest option trader.

see unlike option traders who have no clue - i trade strait up futures cause i know the direction of the market and don't have to make guesses.

Stan Finney had less than $20MM of OPM under management. Give me a fcking break. I know a dozen independents bigger than him that only trade their own money.

"World's largest options trader" lol.

 

[MarkBrown]

Stan Finney had less than $20MM of OPM under management. Give me a fcking break. I know a dozen independents bigger than him that only trade their own money.

"World's largest options trader" lol.

we managed WALMART money you think that's 20 million

omg you're so insecure - des

 

[poopy]

His AUM via Rainbow was public. His accounts were trivial and all on the CTA side. Walmart lulz. He closed the BD three years before he died and Rainbow was the CTA that had couch monies.

 

[newwurldmn]

It was common to have that strategy. The specialist in front of me once told me, "If I sell an option at 1/16 (yes, a long a time ago) and it goes to $1.00 and expires worthless, it was a good trade". That worked better in the 70s, 80's and 90's when options were typical over priced, as most customers bought options. With new margin rules from clearing firms today, not sure if you can still do that and option prices are more efficient now.

could you have made billions selling options then? there wasn’t that much Vega notional to trade especially if you did it as a buy side and margin was less forgiving.


I’m not sure you can do it now and there’s billions of Vega notional in liquidity today. The only billionaires trading options either are market makers who are picking off the flow on all that Vega that’s trading hands.

 

[MarkBrown]

His AUM via Rainbow was public. His accounts were trivial and all on the CTA side. Walmart lulz. He closed the BD three years before he died and Rainbow was the CTA that had couch monies.

you have looked into what might have been in the pocket of a billionaire option trader.

it would be like me making assumptions of you being a crack head from what i see you post.

 

[arturo100]

It's because you're looking at the wrong place.

The TRFs are where ATSes (informally called "dark pools") report their trades. The short trades you see in those files are going to be ones on venues like UBS, Instinet, LeveL ATS, Blue Ocean, JPM-X, Sigma X2, etc. Not short trades on exchanges like NYSE, NYSE Chicago, Nasdaq, etc.

FINRA is responsible for publishing such trade data for the ORF, ADF, TRFs, and the same of corporate bonds through TRACE, and so on. But it's not responsible for publishing on-exchange trades in NMS stocks. As mandated by Reg NMS, that's public responsibility of the SIPs (and private responsibility of exchange prop feeds).

"Nasdaq TRF Carteret" and "Nasdaq TRF Chicago" may sound confusingly similar to the Nasdaq and NYSE Chicago exchanges respectively, but they're completely different venues.

You can get NYSE Chicago short trades from any data source that attributes them properly. For example with Databento:

import databento as db


client = db.Historical()

data = client.timeseries.get_range(
    dataset="DBEQ.BASIC",
    schema="trades",
    symbols="ALL_SYMBOLS",
    start="2024-09-10T13:00",
    end="2024-09-11T15:00",
)

# ALL_SYMBOLS requests do not automatically map symbols
symbology_json = data.request_symbology(client)
data.insert_symbology_json(symbology_json)

df = data.to_df(tz="US/Eastern")

# DBEQ.BASIC contains trades from multiple venues, filter for only XCHI
# You can get full list of publishers from metadata.list_publishers endpoint
df_chx_shorts = df[(df["publisher_id"] == 39) & (df["side"] == "A")]

print(df_chx_shorts)

                                                               ts_event  rtype  publisher_id  instrument_id action side  depth   price  size  flags  ts_in_delta  sequence symbol
ts_recv
2024-09-10 09:02:59.132261015-04:00 2024-09-10 09:02:59.132028288-04:00      0            39          18811      T    A      0   19.62   200    130       205024    115765   RYDE
2024-09-10 09:08:16.217420896-04:00 2024-09-10 09:08:16.217192030-04:00      0            39          12336      T    A      0   14.80   100    130       203995    122473    PBR
2024-09-10 09:16:16.129348408-04:00 2024-09-10 09:16:16.129122868-04:00      0            39          18669      T    A      0   33.02    43    130       203126    129403   EZBC
2024-09-10 09:16:16.129430151-04:00 2024-09-10 09:16:16.129215859-04:00      0            39          18669      T    A      0   33.02     6    130       203100    129404   EZBC
2024-09-10 09:16:16.129491589-04:00 2024-09-10 09:16:16.129276390-04:00      0            39          18669      T    A      0   33.02     1    130       203024    129405   EZBC
...                                                                 ...    ...           ...            ...    ...  ...    ...     ...   ...    ...          ...       ...    ...
[66760 rows x 13 columns]

Many thanks for clarifying matters. I hadn't though about this possibility, but it makes a lot of sense. Thanks also for providing a script to interrogate your database. I have only one question about it. For the sake of saving downloaded data, woudl it be possible to prefilter for the 'publisher_id' 39, whithout doing it as post-processing?
Thanks again for your help and assistance.

 

[Databento]

Many thanks for clarifying matters. I hadn't though about this possibility, but it makes a lot of sense. Thanks also for providing a script to interrogate your database. I have only one question about it. For the sake of saving downloaded data, woudl it be possible to prefilter for the 'publisher_id' 39, whithout doing it as post-processing?
Thanks again for your help and assistance.

Thanks for asking and yes that is a requested feature here. We don't have immediate plans to develop it but will probably do so if we see more interest in it. I'll forward your feedback to the product team.

 

[poopy]

you have looked into what might have been in the pocket of a billionaire option trader.

it would be like me making assumptions of you being a crack head from what i see you post.

His performance was public and AUM was reported as a CTA. So you're implying that he was operating the Walton's FO as some off the books POA. Yeah, nah. You're FOS as usual.







Bently.