Why the strikes on the QQQ have changed.

A

arcane73

Good morning,

Why the strikes on the QQQ have changed.

The round numbers have been replaced and the strike has decreased by 0.22.

This never happened.

Example :

Before 400, 405, 410, 415

Now 399.78 404, 78 409.78 414.78
 
If they make it NS (Non Standard) then no MarketMaker will ever service it anymore and one can be sure to make a loss.
NS is currently the biggest fraud crime committed in options trading, IMO. And they do it on purpose, ie. make use of it...
SEC sleeps.
 
I guess as a "Vulcan from the Alpha Quadrant" you see fraud and bad guys everywhere. These adjustments for Special Dividends were directly done to protect the public, not MMs. Many years ago, Steven Winn paid a large special dividend to shareholders after selling valuable artwork. It was about $6 per share. There was no adjustment to the options. It made puts more valuable and crushed calls. It cost customer a lot of money. The OCC felt it was fair to make these adjustments for the public after events like that.


Quanto said:
If they make it NS (Non Standard) then no MarketMaker will ever service it anymore and one can be sure to make a loss.
NS is currently the biggest fraud crime committed in options trading, IMO. And they do it on purpose, ie. make use of it...
SEC sleeps.
More...
 
Robert Morse said:
I guess as a "Vulcan from the Alpha Quadrant" you see fraud and bad guys everywhere. These adjustments for Special Dividends were directly done to protect the public, not MMs. Many years ago, Steven Winn paid a large special dividend to shareholders after selling valuable artwork. It was about $6 per share. There was no adjustment to the options. It made puts more valuable and crushed calls. It cost customer a lot of money. The OCC felt it was fair to make these adjustments for the public after events like that.
More...

How does that work, won't the market makers just adjust their bid and ask accordingly to reflect the special div, you just have to know whether to exercise early
 
Today, the OCC makes the adjustment. Before the rule change, yes, MM changed their quotes, but if you left a limit order based on the value of an option without the dividend, you would have no time to change it. And, if you had bought calls or sold a cash secured or naked put, you lost a lot of money when the markets adjusted. This is much better for the general public customer, even though it creates a mess of the option chain.

traider said:
How does that work, won't the market makers just adjust their bid and ask accordingly to reflect the special div, you just have to know whether to exercise early
More...
 
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