What are your option prices like from your broker?

N

nxt7

I'm currently looking around for an options broker. I'm particularly interested in trading SPDR S&P 500 ETF (SPY) options. As I am based in the UK, options are unfortunately provided by spread betting firms at ridiculously high premiums and spreads. Furthermore the longest tradeable "options" provided by these guys only have a max expiry of 3 - 6 months, which does not really fit my long term strategy.

Hence I have a small request to ask and was wondering if people could quote some prices they get from their broker for the SPY below?

1) Ask prices for CALLS at strikes 230 and 250 with January 2018 expiry (1 year) - 1 contract
2) Ask prices for PUTS at strikes 200 and 150 with January 2018 expiry (1 year) - 1 contract

Also how many shares are in one contract from your broker?

Considering that most brokers have inactivity fees or required minimums, depending on this information I may be able to decide whether I can afford to trade options at all on the strategies I am trying to implement.

On another note, I managed to find some prices for these SPY options through yahoo finance but I am not entirely surely where these prices are sourced from. Also the prices on yahoo finance seem very cheap for the OTM options like for example, the SPY 250 CALL (Jan 18 expiry) is currently trading at $2.80. Do I have to multiply by a factor of 10 or 100 to get the actual price per contract in $?
 
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Can't answer most of your question, but, regarding the last paragraph, you multiply the option premium by 100 to get the per contract $ outlay. U.S. stock option contracts are 100 shares apiece.
 
Do you seriously want to compare spread betting firms with official brokerages that have to provide best prices according to MIFID???

How many shares are in one contract? Do you have any experience in options at all?

Spread betting is just that... betting firms.... that's trading for idiots...
Brokerages are bound be regulations and provide exchange standardized prices...

I would read up on one or two things before you gamble away your moms savings mate....
 
Hello,

Based on some of your questions, I suspect you might want to do some more reading and studying on what options are and how to trade them. Although you ask keen questions, most of them should be well known before starting actual trading. In fact, several of them should be known before even starting a demo account.

There are various web sites that cover the basics of options trading around the internet. It might be a good ideal to start simple:

1) Read some of the web sites on options (CBOE, options house, options monster, investing, etc.)
2) Get paper & pencil and work out the examples on your own so you understand what is going on
3) Look at the options prices that are listed on CBOE and/or Yahoo to get an understanding of how options are listed and prices

Then you can look at getting a paper/demo account. Since you are in the UK Interactive Brokers might be a good option. You could also consider one of the 'easier/friendlier' platforms for options trading out there (dough.com maybe?)

After you've spent a few months (at least) playing around with it, then feel free to dive in with real money. At this point you should be confident with all aspects of how the theory of options trading works and only need to get used to using a live system.

Good luck!
 
nxt7 said:
I'm currently looking around for an options broker. I'm particularly interested in trading SPDR S&P 500 ETF (SPY) options. As I am based in the UK, options are unfortunately provided by spread betting firms at ridiculously high premiums and spreads. Furthermore the longest tradeable "options" provided by these guys only have a max expiry of 3 - 6 months, which does not really fit my long term strategy.

Hence I have a small request to ask and was wondering if people could quote some prices they get from their broker for the SPY below?

1) Ask prices for CALLS at strikes 230 and 250 with January 2018 expiry (1 year) - 1 contract
2) Ask prices for PUTS at strikes 200 and 150 with January 2018 expiry (1 year) - 1 contract

Also how many shares are in one contract from your broker?

Considering that most brokers have inactivity fees or required minimums, depending on this information I may be able to decide whether I can afford to trade options at all on the strategies I am trying to implement.

On another note, I managed to find some prices for these SPY options through yahoo finance but I am not entirely surely where these prices are sourced from. Also the prices on yahoo finance seem very cheap for the OTM options like for example, the SPY 250 CALL (Jan 18 expiry) is currently trading at $2.80. Do I have to multiply by a factor of 10 or 100 to get the actual price per contract in $?
More...


Im in the UK too. The spreadbetting prices you see are the same as the underlying market (all be it with an extra tick or two in the bid offer spread).

Its a myth spreadbetting companies move the price as and when they want. If they did there would be a free money arb between the spread betting company and the underlying, and the spread betting company against other brokers, it would be great if they did that. People that claim they do are just looking for a reason why they are losing.

But, you are still better off trading the underlying as the extra spread the SB companies give you will eat into profit margin over time. But for ball parking where things are priced they are pretty much spot on. I know this doesnt answer your specific question about 2018 expiries but more your comment about "ridiculous" premiums. The premiums are what you would pay in the real market too. And the spreads.. im seeing about a 3 tick bid offer spread on FTSE options, again not too far different from the underlying.
 
tommo said:
Im in the UK too. The spreadbetting prices you see are the same as the underlying market (all be it with an extra tick or two in the bid offer spread).

Its a myth spreadbetting companies move the price as and when they want. If they did there would be a free money arb between the spread betting company and the underlying, and the spread betting company against other brokers, it would be great if they did that. People that claim they do are just looking for a reason why they are losing.

But, you are still better off trading the underlying as the extra spread the SB companies give you will eat into profit margin over time. But for ball parking where things are priced they are pretty much spot on. I know this doesnt answer your specific question about 2018 expiries but more your comment about "ridiculous" premiums. The premiums are what you would pay in the real market too. And the spreads.. im seeing about a 3 tick bid offer spread on FTSE options, again not too far different from the underlying.
More...

Huh, well wouldn't you know...guess I was wrong about spread betting firms overcharging premiums... These are some price comparisons between CBOE and my spread bet broker:

Underlying SPY price as of Jan 30th 2017: $227.55

SPY 200 Jun-2017 (CBOE)
Calls = 28.9
Puts = 2.1

SPY 200 Jun-2017 (Spread Bet)
Calls = 28.2
Puts = 1.9


SPY 230 Jun-2017 (CBOE)
Calls = 5.2
Puts = 8.7

SPY 230 Jun-2017 (Spread Bet)
Calls = 5.1
Puts = 8.5

Guess I was in the wrong here, but still a bit disappointed I can't trade longer term <1 year options through my spread bet broker though. Looks like switching to a US based option broker may be too expensive for me at the moment...
 
Go for Interactive Brokers. They have some of the lowest commissions. Don't go to those spreadbetting firms. Better to trade with a legit option broker.
 
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