I'm looking at the YM Oct. '05 9500 put option. It has a 0 bid/3 ask. Don't mistake it with no bid, it actually has a "0" bid showing on the screen. Is this the same as a "cab" bid, which means someone wants to pay $1 per lot? When I was an options market-maker on the NYMEX, we used "cab" bids all the time, but this is the first I've seen it on any electronic platform. I'm using IB by the way. If I hit that "0" bid, will I receive $1 for each contract I sell? Anyone with experience with this? Maybe I'll chat with IB online. Thanks in advance.
there goes another misleading information provided by institutions licensed to steal. I THINK TRADING SHOULD BE ILLIGAL. unbelevable I will say it again, how come all of this is legal. bid shows nill, yet there is a bidder. what a joke. I have not even traded a dime yet...doing a demo. i am over here lol'ing . no wonder 9 out of 10 loose. if this is not illigal, then there is hypocracy going on in DC
First of all, why would you do this? It cost you $1 a contract in commission at IB. So you don't make any money. Second, as I understand them, "cab" trades are closing only. Meaning you cannot open a contract with a "cab" trade. Only if you are already long the contract can you sell it for a buck. Regardless, there is no reason to do this.
Mav74, Of course I wouldn't do this trade. It nets me $0. I was trying to find out if those "0" bids showing were actually legit. IB told me they were no good, even though there was size showing.
I think the size shows because of the autoquote programs that YM EMM run. Also, when you do a cabinet trade, it's not really a trade per se, but an accounting transaction. So technically there really isn't a bid.