Backing Away Records

Discussion in 'Options' started by the_dude, Apr 5, 2002.

  1. I'm really glad to see that the backing away thread has been popular. What I propose we do next is to keep a thread (this one) going where we can all post specific incidents of backing away on US options exchanges.

    When posting, please adhere to the following:

    -Keep the record as brief as possible (any comments outside of the actual record should be sent to the original "Backing Away" thread). Even if you think this thread is a waste of time.

    -Note the date/time (Please be as precise as possible).

    -Note the option symbol

    -Note the exchange

    -Note any details - i.e. was autoex on/off; PAR, etc.
  2. Baron, could not afford the bandwidth to keep up with this one.
  3. AEP-4/17/02

    AEPHH - 10:35AM - BID OF 7.60 NOT HONORED - limit order sent in at 7.50 while bid quoted 7.50 - not filled - bid then increases to 7.60 - FINALLY filled about 30sec later at 7.50 despite live bid of 7.60. (CBOE)

    AEPEI - 10:54AM - BID OF 2.65 NOT HONORED - FILLED AT 2.60 APPROX 2min after order sat live at CBOE - initially sent in at 2.65 when BB was 2.65 - sat there for over 1min at same price as bid - bid then dropped to 2.60 - resubmitted order and FINALLY filled at 2.60 after ~1min more of waiting (after MM realized market wasn't dropping any further).
  4. Bought OEX May 550 Puts this morning.

    12:09 EST: Put in a SELL order @ 9.50. Bid/Ask was 8.80/9.50. OEX started to go up a bit, then went down again to 555 area.
    Interestingly enough, the Bid/Ask became 7.50/9.50 - a $2.00 spread!

    12:14 EST: Modified my SELL order to 10.20. It was confirmed at the exchange (status color was green @ IB). Bid/Ask at that time was 9.50/10.20, and kept moving down as OEX kept moving down.

    12:15 EST: Cancelled my SELL order. Status was yet unconfirmed at exchanged (status color pink @ IB). At this time, Bid/Ask was about 10.50/11.50, more than my modifed SELL order of 10.20.

    12:19 EST: Got a confirmation that my SELL order, which I had increased then later cancelled, got filled at 9.50
  5. ...that's not "backing away". That is "too late to cancel" because you got filled before you were able to cancel/replace your original order.

  6. I don't agree that this was a 'too-late-to-cancel' situation.

    When I modified my order to 10.20 (from 9.50), the market was just moving down normally, not moving fast. There was a few ticks when the ask price even moved down to 10.00, below my modified order of 10.20, and the market was ticking up and down between 9.50 and 10.00 for a couple of minutes.

    I really believe this is a case of CBOE just holding your order and filling it at a price advantageous to them, taking a portion of traders' profits away. I only trade OEX options and watch them all day, so I know today's action was out of the norm. I mean at one point, the bid/ask prices were not even moving while the underlying was. Then when they moved, the spread was as big as $2.00! C'mon.

    Alternatively, if it's not CBOE's fault, then maybe IB's TWS does not really process/allow modified orders. It makes you think the modified order is working, when in fact your original order is still the "active" one at the exchange. I'm thinking it may be better to just cancel the previous order and then put in a new one.

    Also, the same thing happened to me last Friday, April 11th. Similar situation.

    Man, can't wait for BOX to open. Hopefully option traders will have a better chance with them.
  7. That is option trading...
  8. meteoxx,

    sad to say, but you are right.

    okay, how do I open a futures account???

    I'm starting to really believe that it's easier to make money trading futures. I'm aware it's riskier. In my experience, I have made many calls on the market that are correct; my analysis is right (90%) most of the time, sometimes dead-on, but still can't make money because I'm trading the options, not the futures or stocks themselves!

    Unfortunately, IB is not taking any accounts from Canadian customers at this time. Maybe I'll scope out the other brokers.


    PS. I did make money today on my positions; I could have made more if CBOE didn't cheat me out of the rest of my profits.
    Tomorrow is another day...
  9. It is easier to trade futures than options, fairer game, level playing field.

    We trade options because we have been doing it for a long time and make money at it; however I burned a lot of money finding out how it works.

    Set up a US LLC in Nevada for about $1K US and call TN, they will accept that.
  10. meteoxx,

    ANy ideas on websites/companies through which I can set up a US LLC in Nevada?

    ALso, who's TN? Won't IB accept US LLC companies incorporated in Nevada?

    Thanks a lot.
    #10     Apr 19, 2002