You see options buyers are doomed.

Quote from rs7:




So is no one working orders now?
Peace,
:)rs7
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Nope, the market changed since you were there. What incentive would a DPM broker have in putting up a bid to leg into your spread when it takes away potential profit for his firm.

If you want fills, increase your size by a hundred(well, maybe twenty or thirty).
 
What instruments are you talking about ? Equities, indexes or futures? When I was trading in an open outcry market-soft commodities, we would give quotes on flies, verticals, calendars all the time sometimes only 1 tick wide. I don't think times have changed that much in the pit traded markets specially the quiet ones where the locals just want to trade no matter how small the edge is.
 
Quote from Trajan:


What incentive would a DPM broker have in putting up a bid to leg into your spread when it takes away potential profit for his firm.
If you want fills, increase your size by a hundred(well, maybe twenty or thirty).
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Trajan,
I was thinking, wouldn't some profit be better than none, with regard to "potential profit"? I mean, if the DPM/LMM/Specialist thinks he can get a good hedge on, might he take the trade even if it is not at the posted quote? Also, is there a firm quote rule on spreads? If so, might he take down the small order to avoid having to step up and fill the balance up to the firm quote size? I appreciate your help on this.
 
Oops, I don't mean to say that MMs are actually at those markets and not trading. The point was to say a good floor broker would try and figure out a way to get it done between the markets. This could mean putting up a bid and then taking out an offer or trading each side with a different person. Another way is for a broker to show it to out of pit traders(on and off floor). There is less incentive to do any of this now. Rs7 broker would probably show it to off floor traders if it was a 100 times spread, but for ten, forget it(although, if they had some desperate BD in some illiquid option series, it could happen). Also, a lot of the independent floor brokers have left the pits because of the skyrocketing costs of the late ninties and the floor wide DPM/LMM systems. Many of the remaining brokers work for the DPM or are roving. Roving brokers aren't going to sit in the pit and work a ten lot. What does Rs7's broker do? He leaves it with the DPM broker to fill. What does the DPM broker do? Sticks it in his deck until the customer calls to complain why isn't he filled when the markets lined up(this used to happen before too). Where is the incentive for this guy to pull off some trick to get spread done? None, as far as I can see.

As far as firm quotes go, it is my understanding they aren't held to those made by customers, this would include spreads. If there is a one lot offered, you should assume that's all there is.

Also, on illiquid options, they may be there but want to squeeze you for more. It works because enough people pay up and there isn't a good way to disseminate spread orders for small lots. For large orders, word gets out.
 
Nope, blew out a couple of years ago(fuck, it's been three). It seams like Chicago is a bane on my existence.

I'm not familiar with how the BOX will handle spread orders, but it will probably be an improvement upon the current system for small lots.
 
Quote from iceman1:

thanks for your reply...

was wondering if you're still in Chicago?
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No, I left Chicago and have been trading equities in Florida for the past 7 years.

Trajan, thanks for the input. Makes a lot of sense. I guess all I can do is continue to leave my day orders in. I could up them from 10's, 20's, 30's, and go to 100, but if I did, I would want better prices still. So I don't know how that would work for me.

But as you say, there doesn't seem to be any incentive for anyone to work the order. Particularly my trading desk. I should call them out on it, and ask what it is they actually do, or with whom they are talking on the floor. I always figured since we clear through SLK, it is a safe bet that they are talking to SLK guys on the floor. When I traded, they were among the best. This is what really surprises me most about not getting filled.

Then again, when I was there, there was almost no automated trading. Now, maybe the spreads are too much like work for the guys on the floor. I hear the most outrageous quotes for common box and butterflies. I mean, everyone knows the value, but you can't make a trade without giving away the store (price wise).
So they just don't happen. I mean a $5 box is worth $5. So why is it $4 to sell and $6 to buy? Not that I really care, or expect to do them off the floor, but still, I would think if the MM's could guarantee themselves a quarter, why wouldn't they? No haircut, not risk, just sure money. But there seems to be no interest. What am I missing?

As for the inquiry as to liquidity....almost all the orders I have tried have been OEX. (with some IBM sprinkled in). So liquidity shouldn't be a factor.

Peace,
:)rs7
 
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