Cabinet Trades and Pricing

Discussion in 'Options' started by jwcapital, Mar 7, 2009.

  1. I always wondered about cabinet trades and pricing. I trade puts and calls on the s&p emini. When you have a deep OTM option, you will notice that there are no bids. The minimum tick for this options is .05 (multiplier is 50). I have attempted to sell these options by stepping in front of the market maker and post an ask price of .05. My ask is never hit. I do not know if I can make my ask lower than .05. Given my commision structure, it isn't worth going lower. In any case, is it ever possible to sell a long option when it is "cabineted?"
  2. johnnyc


    nah, can't go lower than .05 and yeah sometimes you can sell a long position at the cabinet price
  3. Surprisingly, I put in a limit sell of .05 on two cabineted call options today and someone actually bought them. guess it helps when the market rises 35 points.