The options market seems untradeable now

MKTrader said:
Are you saying we can't believe the hype from TastyTrade and Options Alpha types...that Joe Sixpack with a day job can't amass a small fortune trading and managing 20-30 small positions...especially with insane volatility?
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There is actually something much better and easier than tastytrade and Option Alpha for Joe Sixpack:

There is this recent Ad on Yahoo Finance of a testimonial from someone who went from $80K in debt to making $2.8M trading options in his spare time in a year. Said we could do the same, just joined for $xxx a month!

In all seriousness, amateur retails can certainly make money trading options but for this amateur, I had to work very hard just to find one profitable trade. :banghead:
 
ironchef said:
There is actually something much better and easier than tastytrade and Option Alpha for Joe Sixpack:

There is this recent Ad on Yahoo Finance of a testimonial from someone who went from $80K in debt to making $2.8M trading options in his spare time in a year. Said we could do the same, just joined for $xxx a month!

In all seriousness, amateur retails can certainly make money trading options but for this amateur, I had to work very hard just to find one profitable trade. :banghead:
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Managing a bunch of positions (especially if you're a net seller, vol is through the roof and bid/asks are awful) WHILE working a day job is a nightmare, that's for sure...especially if you're in a staff meeting or car when it goes down.
 
Ive sold ATM SPY puts (usually at the open) for the past couple of weeks and done really well due to the vol. I could really tell it dropped today.
 
You can get screwed if you are not paying attention but their is opportunity’s well. You gotta be strict with what your willing to pay and do a shit load of cancel and replacing orders.
 
floho said:
If a stock doesn't move 10 percent a day, you don't make money. Bid and asks that used to be .05 apart are now 1.50 plus apart. We should all protest and remove ourselves from this option market till the market makers, brokerages etc. make this a fair trading field.
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Welcome to the deep end of the pool.
 
floho said:
If a stock doesn't move 10 percent a day, you don't make money. Bid and asks that used to be .05 apart are now 1.50 plus apart. We should all protest and remove ourselves from this option market till the market makers, brokerages etc. make this a fair trading field.
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Good point floho
Bid-ask spreads have popped to double the levels of the global financial crisis GFC.
Take this graph of market width of the bid-ask spread in volatility points. It measures the weighted average of the S&P 500 components. In 2008 the bid-ask IV spread was 11%, Feb 2018 was 9%, and the last couple of days market width > 20%.
af36d7d539200fae62ce4552646ff6bd.png

https://gyazo.com/af36d7d539200fae62ce4552646ff6bd
Similarly bad for the Nasdaq 100 components, though the components are tighter than the S&P500. The Nasdaq 100 components market width in IV in 2008=8% and the last couple of days market width 15%.
7e251b2c749830826684d0addc1fbe73.png

https://gyazo.com/7e251b2c749830826684d0addc1fbe73

The only markets that have held up are the SPY and SPX. Other than that it is terrible out there.
On these non-liquid names, I have noticed that the fills are the best if you put in spreads. If you put in an order mid market I have not had much luck.
 
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