I think the rules for stocks should apply for options as well. I have limited knowledge about HFT so could not comment much. However, I saw JPM got fined $1 billion for spoofing last year or so, so I would think mm doesn’t mind to do illegal front run, maybe the deal is, is it big enough for the Sec to catch and fine them.
Hi Robert, on certain options I put small size on three Exchanges I see do some ugly prints. Today the Bid/Ask was $1.00 x $1.20 100x100 I had some contracts fill at $1.87(Sold) more hit $2.00 a odd Exchange. What causes weird or terrible fills for buyers or sellers outside the NBBO? LightSpeed and IBKR hit the $1.12-$1.20s while Retail is filled almost double? They have never got busted, it’s part of a tiny edge I discovered when it works.
I have no idea when those trades occurred or if they were part of a spread. Option exchanges do not allow trade throughs so it must be something else if you see a market 1.12/1.20 and the next sale is $1.87. I would ignore that volume.