Etrade options marking methodology

I agree with Bob! MID is best. While the algo referenced for sometime using LAST sounds logical on the surface, it is NOT better than MID for representing the price for making decisions!

 

Bob, does Wedbush have an autoliquidation protocol like IB?

 

what does this mean?

 

Neither mid nor last is good for making decisions.

 

Bid on a long - Ask on a short - same as OCC risk and the marking almost all institutions use.

 

NO, not without a margin or risk call that was ignored. It is never automated.

 

Are you trading retail...?

I'm asking because your posts are too insightful for a retail trader.

 

Strictly PA now. Was institutional as an electronic market maker and then a prop trader for a major bank.

 

I thought all Elite traders used InteractiveBrokers,

I was under the impression Etrade was for amateur, retail, dumb piker accounts destined for doom.

 

Agreed that midpoint is more accurate. This is evident by the fact that CBOE uses the bid-ask midpoint of SPX strikes to calculate VIX:

http://www.cboe.com/micro/vix/vixwhite.pdf