Towards a free options marketplace

G

garbo

In another thread some people have been discussing option cancellation fees (again). My conclusion is that cancellation fees are intended to discourage smaller participants from trying to gain the spread. The spread tends to be very large since any potential competition is stuck with a big ball & chain.

Since competitive marketplaces are generally good for everybody (except the fatcats who manage to stomp out competition by some devious means), the SEC should get its a** in gear and ban all of these anti-competition techniques such as cancellation fees and prohibitions on playing both sides of the spread.

The options market is totally for suckers right now. Anybody with any sense here knows that (unless you're selling options...).

Still, think how useful options could be for hedging your positions when you're in a bad place. Unfortunately, this would be true IF AND ONLY IF the spreads weren't so huge due to SEC-facilitated restrictions on open competition.

Don't get me going...
 
Just a little quote from Yahoo:

"Greenspan repeated his opposition to regulating derivatives, but said heavy concentration in the market 'gives me and others some pause.' 'If a major dealer exited and other dealers were unwilling to fill the void, the liquidity of the market likely would be impaired,' Greenspan said."

Isn't this similar to the options marketplace? By refusing to let anybody except the big boys play the game (and share the profit/loss), all of the risk gets concentrated in a dangerous manner. Letting everyone participate in the options markets on a fair level would spread the risk among more players.
 
Yes, a fair market for everyone to take risk while betting for rewards. However, this is rather a wishful thinking. "They" will never let it happen, not even let fairness come a little close.

So, my honest 2 cents, give up your hope now and hate the "they" hate them until they go to the hell. Once a while, one or two of the "they" indeed does so. Then it will be time for us to have some beer.

Again, let me repeat, do not do not touch options for you own and your family who you really love.


Quote from garbo:

Just a little quote from Yahoo:

"Greenspan repeated his opposition to regulating derivatives, but said heavy concentration in the market 'gives me and others some pause.' 'If a major dealer exited and other dealers were unwilling to fill the void, the liquidity of the market likely would be impaired,' Greenspan said."

Isn't this similar to the options marketplace? By refusing to let anybody except the big boys play the game (and share the profit/loss), all of the risk gets concentrated in a dangerous manner. Letting everyone participate in the options markets on a fair level would spread the risk among more players.
More...
 
Quote from garbo:

In another thread some people have been discussing option cancellation fees (again). My conclusion is that cancellation fees are intended to discourage smaller participants from trying to gain the spread. The spread tends to be very large since any potential competition is stuck with a big ball & chain.

Since competitive marketplaces are generally good for everybody (except the fatcats who manage to stomp out competition by some devious means), the SEC should get its a** in gear and ban all of these anti-competition techniques such as cancellation fees and prohibitions on playing both sides of the spread.

The options market is totally for suckers right now. Anybody with any sense here knows that (unless you're selling options...).

Still, think how useful options could be for hedging your positions when you're in a bad place. Unfortunately, this would be true IF AND ONLY IF the spreads weren't so huge due to SEC-facilitated restrictions on open competition.

Don't get me going...
More...


Yep.... right on bro!

the Sherman Anti-Trust Act is honored by not enforcing it at all... or very selectively when big copmanies like SUNW etc. go after MSFT. Most government lawyers who are supposed to uphold the law and enforce these things in the marketplace and elsewhere... like... let's say oil companies selling gas at the EXACT same price or usually within a few pennies of each others' company are really a bunch of lazy good-for-nothins that are seeking some pension and a paycheck. Sucking off the taxpayers... witness the Merrill Lynch fiasco... it took a NY prosecutor to go after them and at least get something?! Uh.. where were the SEC scum????! :p

Yep the American way.... give as little as possible and take as much as you can steal! Now who in their right mind would think any 'god' would or should bless this mess anymore than any other Nation??! :D

Ice
:cool:
 
I would like to see the exchanges suffer as a result of this action. Better yet, maybe the BOX (or another entitity) will arrive and take advantage of this newly imposed fee structure to gain a competitive advantage.

I agree that the fee is intended to create a certain behavior pattern among customers. Apparently the exchanges felt that the amount of business lost would be more than offset by the fees imposed. I hope they are wrong.
 
Are the cancel fees not applied equally to anyone regardless of account size? I believe that the cancel fees, however annoying, are not discriminatory the way the PDT rules are.
 
I think they cancel fees are imposed only on retail traders. If you're a market maker, you don't pay cancel fees.

This helps keep retail traders from buying and selling to one another. You're forced to buy from/sell to the market maker (unless you place a limit order and just leave it...).
 
The problem with the box, even if it does not have a cancel fee, is that the market maker can improve on the bid/ask, that you are trying to capture, by 1 cent.
 
In my opinion, after the comments released by Greenspan about derivatives, after the comments about "Bye Bye Strong Dollar" (look the Finance section of yahoo.com), it seems that the current US administration wants to discourage trading (any type of trading) and, in general, financial activities.

Why people should invest buying power in a currency (US dollar) that is losing 1%/day against the Euro?

Why people should invest money at 0.70% credit interest??

Why people should trade US options markets that are now so expensive and unfair?

Why people with little balances should suffer the PDT rules? For what?

Hope they know the fact that without financial activities and trading capital many firms will fail, and the US dollar will be trashed directly into the bin...
 
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