Deep out of the money options pricing

Discussion in 'Options' started by arden123456, Sep 20, 2016.

  1. Options pricing tables will routinely show deep, deep out of the money options priced at $0.05 or $0.10 ask, yet when orders are submitted at those prices, the listed $0.05 or $0.10 ask prices disappear and the order goes unfilled. Orders for those same deep out of the money options typically don't get filled until my submitted bid prices are much closer to ~$0.40.

    Are those rock bottom deep out of the money options with $0.05 ask prices just not at all realistically available for purchase?

    Why are those rock bottom ask prices even listed if there is no intention at all of filling at those prices?
     
  2. Robert Morse

    Robert Morse Sponsor

    -Are these equity, index or options on futures?
    -what trading platform are you using?

    I have never had that problem with any listed exchange.

    Bob
     
  3. ETF options or equity options
    Trading directly through brokerage site- TDA

    I should clarify that, when I enter the buy order for $0.10, the listed ask of $0.10 will disappear and be replaced by another higher priced ask, $0.20. And if I were to submit a buy order for the $0.20 deep deep out of the money option, the $0.20 ask will disappear to be replaced by an ask of $0.30, and so on.
     
  4. I agree with Bob. Never saw that with equity/index options. However, I have observed movement of the Asked, to higher values as I increase my Bid on some less liquid options. If I bid at the asked, price, am always filled (sometimes partial if the ASK size was insufficient).
     
  5. Another useless discussion... OP provides no specifics, ticker/strike/expiry, date/time of order & etc, and everyone throws out guesses.
     
    JackRab and newwurldmn like this.
  6. is it possible to investigate past shifting/ disappearing ask orders even when no trade occurred?
     
  7. ajacobson

    ajacobson

    If it was a simple limit order it would have autofilled.
    Multiply listed option any unfilled balance would have shipped.
    Your broker owes you a fill and should go back to the exchange and claim a fill
    If it wasn't a simple limit order - say an AON that changes the circumstances
     
  8. It was a limit order for the quantity of shares that the ask was showing.

    Is there some market maker strategy that would explain a disappearing ask just before my ask shows up on the bid/ ask table? It appears to be coordinated, and not an isolated erroneous instance, for the ask price to constantly increase without filling any of my bid orders.
     
  9. Check your unfilled order's timestamp against that symbol's quote recap. I'm wondering how you could not know that -- are you a paper trader?
     
    Last edited: Sep 20, 2016
  10. ajacobson

    ajacobson

    Market Makers would never have seen your order. Your brokerage house's algo would have sent it to a payment for flow exchange. This is why some exchanges have three models. Market Makers would not have had the opportunity to interact. Tell TD they owe you a fill. If the circumstances are as you describe you are owed a fill.
     
    #10     Sep 20, 2016