Can anyone tell me why I cannot get out of a position. I bought for slightly above the bid a few days ago. My spread has increased in value buy about 50% - maybe a lil more depending on the time of day. I am asking 5 cents above bid and no one has taken it for days... (It has a $1 bid/ask) What gives here? It is 1, 2 and 3 strikes OTM fly for Sept. (if that matters) - Of the most actives. I know I make more being closer to expiration but I made enough to make me happy percentage wise to get out. Thanks.
Some of the things you find humorous, I do not. I appreciate your valuable and educational input though. Actually it was 10 cents.
If you keep leaving it out there just off the bid there is NO incentive for any MM to step up and buy it from you. With the fly youâre crossing 3 markets and it sounds like youâre not in a very liquid market for those options. Unless that 5 cents is a huge % of your profit then why not just go ahead and hit the bid to close?
Ok I guess that makes sense. But that was my predetermined exit point, just happens to be close and I have a few weeks left. I was waiting for the market to come to me. When I got in, I bid about the same way and it worked. I am using the RUT, so I figured it would be liquid. But thanks! I will re-access.
If you don't mind me asking, what was the size of the order and which exchange did you route the order through? You should be filled at very decent prices on the RUT. I can take a look at it tomorrow and let you know why/if you might not get filled.
I have a question. If one of the options is deep ITM there may be little interest in it. Does not the MM intend to break up the fly and, if there is a "stinky" option in the mix, he may have little interest in the position?
A mm would simply trade the fly for edge so there is little interest in it unless he, the mm, is closing on it or see's edge in it. Generally the market will make the customer pay the barriers of entry or exit (the bid offer spread ) in a position that has three legs. Granted that barrier has shrunk considerably over the past 7 years but there still needs to be incentive for the mm to fill the order. If you were a bigger player and you wanted to close that position you might have a desk or a floor broker show it around looking for someone who'll be interested in taking the other side of the trade because they may be interested in that position and not just making a bit of edge on the trade. This adds incentive for the mm's to put the trade up since now they know its being shopped around and they may now be willing to do it for a smaller slice of edge since they're competing with off floor guys.
Laugh if you will, but being I am just starting out I did one total fly with the top just OTM, and the next two obviously OTM as well. There have been may ups and downs and at one point I was below the bid and STILL did not get a fill. I use OX. With all this BS I am about to just give up. I finally thought I had something going here. I watch the damn thing all day and have gotten VERY good at knowing where it is going in the short term, but the options seem worthless to this outlook.