DIA and OEX Options Question

Discussion in 'Options' started by Tom631, Aug 5, 2007.

  1. Tom631


    Friday I was looking to buy some puts as I felt the market might go down more. I first looked at OEX options as I use to see them many years ago be very active....But when I looked it seemed to me that there was hardly any action in them...Why is that?

    Then I looked at options on the DIA....Very active but doesn't seem to move much.

    Could you please explain the best option to buy when you make a bet on the direction of the Dow? ( no futures)

    And is the OEX not popular any longer?
  2. The proliferation of various options on the S&P500 has stolen much of the thunder from the OEX.

    I'm guessing you don't have a futures account so I won't exalt the virtues of E-mini options or pit traded SP but the SPX contract traded at the CBOE should suit you fine.

    One word of caution though. CBOE index options trade more volume via open outcry than on the screen. Hence the bid/offer electronically may seem too wide. If you have access to a traditional broker who can place your order on the floor you'll experience price improvement from the screen quoted markets.

  3. Tom631


    Thanks for the thorough explanation.
  4. Tom631


    You're correct I don't have a futures account as I have only experience in stock options and when I wanted to bet on the direction of the market I would just use the OEX options..

    Can you or anyone else here recommend a good way for me to learn about futures and the E-mini options you mentioned. A book recommendation maybe?
  5. You might also want to look at options on SPY (1/10 of SPX) and QQQQ (I think it's 1/40 of NDX).
  6. segv


    You would be paying a very large premium for those puts.
  7. Tom, the Chicago Board of Trade does a fab job of providing educational resources.

    Here's just a sample.



  8. Tom631


    Thanks for all the suggestions.
    And those links are just great. And FREE. Thank you for providing them. Just awesome.
  9. IWM has the best liquidity, I think ...
  10. cdowis


    1. Any book by Dave Kaplan for a good understanding of option strategies. Very readable but somewhat out of date.

    You might want to look at Dan Sheridan's webinars on CBOE once you understand the basics.

    2. IWM is good for the new trader, but RUT is more efficient when you are ready to do serious trading.
    #10     Aug 6, 2007