I've been trading wti options through a full service broker by watching cme's free real time quotes for the cl contract. I want to change to internet brokerage but have some questions. Do all crude options go through the nymex pit or is it possible to do it electronically. Next, are real time electronic quotes for crude options shown on data/broker feedsor does someone need to call nymex pit for the latest price. I'm just trying to figure out how to get by 3 middlemen [broker-his chicago desk-nymex pit] and be able to see on a screen a real time crude option price. As it is now i only see the contract price and take their word for the option. The Texas broker tells me all his prices are 30 min delayed=totally dependent on his chicago desk. Help !!!
Are you referring to futures options? You should switch to Interactive Brokers as soon as possible. The commissions at the full service brokers will eat you alive.
I think nymex options are still pit traded. IPE options are electronic but IB looked at offering them but backed off because there were not enough quotes.
Energy options won't be traded electronically for quite some time, if ever. Why? They're too complex. Most energy option trades are spreads, often complex spreads, not the vanilla variety that interest the average retail trader. Add the term structure/seasonality that vary by product and it gets even more complex. I can't imagine tying to put on a call on a heat crack spread vs. crude, electronically. How the hell would I do it? Leg into it? Not going to happen. Or what about a butterfly on crude vs. a call spread on gasoline? Chances are there isn't anyone sitting around thinking it'd be a good idea to post their bid/offer on the specific call spread that interests me, I'm going to have to pick up the phone... I think the closest thing to an electronic platform that we'll see for energy options is a platform that essentially facilitates customized options i.e. you could request a quote on whatever position(s) is of interest. And I'd be surprised if it's an exchange that offers something of this nature. Most likely to be someone like GFI. And they'll employ the cleared products/EOOs for credit reasons. Optionable supposedly has something like this but I have yet to hear of it being used in my markets. Take a look at the IPE. It's been electronic for quite some time now and 99% and 99.99% of the options on brent and gasoil, respectively, trade OTC because the screen simply won't get the job done. If I were an individual wanting to punt energy options I'd look at the options that can be cleared via Clearport and start building a relationship with an OTC broker(s).
They said the same thing about Euro Dollar options. Now they are doing about 150k contracts a day on the screen. Although I do agree, the liquidity regardless will always be deeper OTC.
While my experience in other products is limited I'm under the impression that there's a lot more activity in cross-product spread options in energy than in other asset classes? Sure, they can list vanilla options electronically and there will be some interest but the majority of those trading energy options aren't very interested in vanillas nor are they interested in making markets for "One Lot Joe".
Agree with the above. Big option buyers need options that meet their specific needs and the sellers are happy to provide for a price. Think the market will evolve to support volume on vanilla options but in the meantime call up GFI, Natsource, Evolution etc. and ask how much they'll charge you per month for a Trayport screen. The brokers sometimes list more complex options that are trading on their Trayport / Reuters screens. Problem is that "One Lot Joe" is never going to get credit with the OTC players so looking is all you can do...
thanks guys- still feel vanilla electronic real time crude options quotes/ trades[just crude] would build a market just as it did for the futures contract,which didn't exist when i was in college.