Why is the b/a spread so wide on SPX?

Thanks for the responses so far.

Is the SPY cash settled? If so, I probably will just use the SPY.

MTE you mentioned that the quoted prices are wide but it's possible to get better prices. How do I know for sure if I enter a position that I'll be able to get out a decent price? This market seems a bit rigged to me.

When is the SPX going to switch over from the open outcry system to electronic?
 
Quote from wooldog:

Thanks for the responses so far.

Is the SPY cash settled? If so, I probably will just use the SPY.

MTE you mentioned that the quoted prices are wide but it's possible to get better prices. How do I know for sure if I enter a position that I'll be able to get out a decent price? This market seems a bit rigged to me.

When is the SPX going to switch over from the open outcry system to electronic?
More...

No, SPY is not cash-settled, it has physical-settlement.

You don't know for sure that you would be able to get out at "decent" prices, but if you are not greedy then you should be able to get a reasonable price.

The question is not why SPX is gonna switch from open outcry, but what took them so long to do it? :)
 
Quote from Jerkstore:

The SPX is the last bastion of open outcry at the CBOE. The SPX is the only pit at the CBOE that still uses the old school method of disseminating only one MM company's quotes at any given time. There are about 5 different firms that rotate cycles to drive the wide screen markets. It's a painfully antiquated system that they haven't changed because it is still a singly listed product where the exchange and all MM's are making a killing. Noone wants to kill their golden goose.

As soon as the SPX is listed at the all electronic C2, this should change quickly. In the meantime, trade CME ES options or SPY options.
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I know it's supposed to happen in Q1 2011 but does anyone know what the target date for the C2 listing is?
 
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