SPX options

I

indahook

Anybody else trade em? I want to know who the loser is taking the other side of my trades...jk :D


Seriously though. The wide spreads forces me to take the perfect setups. Of which I only have two. Actually its only one using 30 min charts 21 days of history. But inverted for taking the other side. I only buy options in the SPX and the max holding period is about 4 days. And only ATM/FM the time of signal.

So you sit....and wait .....and watch....for days sometimes. And then you strike. Lifting that offer. In the back of your mind you know you better be disciplined cause your gonna be OTM by 2 points straight away. And just getting involved to get involved can be VERY expensive.

I love the CBOE. Please dont ever give up the market making exclusivity of this issue.
 
Why not just trade the ES and be done with it? Swing trading S&P options is never a good idea - they only trade on the CBOE so the spreads are too wide to profit from. If you can profit from this strategy, though, then may God's love be with you.
 
First, the ISE has filed suit to list SPX options so that will be great if it ever happens.

Second, SPY are not that attractive because you have to trade 10 times as many so you are paying 10 times the bid/ask and 10 times the commissions. Furthermore you receive significant preferential tax treatment on SPX and not on SPY.

Third, ES options are a good idea if you want SPAN or trade them with ES futures but otherwise you have to pay two times the bid/ask and two times the commissions vs. SPX, and there is not as much volume so you are more likely to get filled in between the bid/ask on an actively traded SPX option. SPX July 1525 Calls traded 20,494 contracts and an active ES July Call traded a few hundred.
 
Quote from opt789:

First, the ISE has filed suit to list SPX options so that will be great if it ever happens.

Second, SPY are not that attractive because you have to trade 10 times as many so you are paying 10 times the bid/ask and 10 times the commissions. Furthermore you receive significant preferential tax treatment on SPX and not on SPY.

Third, ES options are a good idea if you want SPAN or trade them with ES futures but otherwise you have to pay two times the bid/ask and two times the commissions vs. SPX, and there is not as much volume so you are more likely to get filled in between the bid/ask on an actively traded SPX option. SPX July 1525 Calls traded 20,494 contracts and an active ES July Call traded a few hundred.
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I take it you've never traded an ES option.
 
Quote from weewilly:

options on SPY get 60/40 tax treatment, same as SPX.
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From GTT: "How are options on ETFs taxed like their underlying ETFs or otherwise? The IRS has still not issued guidance, so there is no clear answer."

I don't trade SPY options so I have not kept up, do you have a link to the IRS ruling?
 
Quote from opt789:



ES options are a good idea if you want SPAN or trade them with ES futures but otherwise you have to pay two times the bid/ask and two times the commissions vs. SPX, and there is not as much volume so you are more likely to get filled in between the bid/ask on an actively traded SPX option. SPX July 1525 Calls traded 20,494 contracts and an active ES July Call traded a few hundred.
More...

He lifts the offer, meaning he wants a 50 or 100 lot, immediately. If he was a one or five lot piker, he would probably negotiate the spread and look into the other products you mention. Plus I think he said he's a buyer only, so not sure what all the SPAN talk was about.

I just wish I could take the other side of him, but our firm doesn't clear the SPOOZ and I wouldn't be able to hedge them.

I guess you're off the hook for now, India! :D
 
Anytime you’re lifting the offer of a market maker he’s happy. Don’t kid yourself into thinking they don’t hedge that stuff with the futures. I love days when the index ( spx ) is 5 or 6 bucks and the front month .30 delta call is unchanged on the day and the calls below them on the delta curve are lower on the day. Makes me wonder how many retail traders are out there scratching their heads.

Seriously anytime you’re lifting an offer it’s not necessarily a bad trade just understand that there is edge in it for the market makers and they’re happy you took out the offer.

IB filed that law suit a long long time ago, and they’re taking on Standard and Poors themselves too since they really own the rights to the product. Don’t count on it being multi listed anytime soon.
 
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