Futures options liquidity issues

Discussion in 'Options' started by nravo, Nov 3, 2006.

  1. nravo


    Anyone trade options on the gold (100 oz. contracts) futures (electronically)? I'm not seeing many bids beyond the ATM strikes, but quite a few asks. Ever worth putting in a bid or, if selling, a lower priced sell order? What's the best way to play this? RFQs? Oh, and should futures options questions go to the futures forum or the options forum?
  2. What contract month are you looking at?

    I show bids on pretty much every ZG Nov option up to 685 and down to 565.

    The spreads aren't super, but they're not horrible. Try getting a fill somewhere near the midpoint and see what happens. I've found some markets will get you fills pretty quickly (ES, US), others will let you sit forever if you don't hit the bid or ask (ER).
  3. nravo


    I was looking at December, maybe writing the 570 puts, saw nothing but an ask - no bid. Am I doing/looking at the wrong thing?
  4. nravo


    Actually, I was looking at the January ZG puts at 570 with an ask of 2.70 and no bid. That far out the liquidity disappers? Didn't seem so far out to me>

  5. There's practically no activity in the back months of Gold options at all. I show January '07 has a total open interest (all strikes) of around 15 options. Feb is slightly better, but not much (100 options OI).

    This is common with futures options--the underlying contract may not be very popular, and so the options are very thinly traded. In many futures options, I've seen only the front month traded actively.

    Particularly with gold, silver, and the rest which have no "new crop/old crop"--it's unlikely later months will be very popular.
  6. nravo


    Thanks for the information, have run into the same issue with options on bond futures, too, which surprises me even more considering the underlying.

  7. I've had pretty good luck with back months on electronic bonds. I can at least go back 2 months beyond the front in general.

    If you really want long term, you should take a look at Eurodollars. There's a pretty liquid market for 1 and 2 yr mid-curves. Otherwise, if you stick to the non-serials on the quarterly futures, the options are pretty liquid as well.
  8. nravo


    Been hearing that. By any chance you know the best (deep and liquid) markets for FO in Asia?

    Thanks again.

  9. I've heard much about KOSPI options, but they are currently unavailable to US citizens, so I haven't looked at them in any depth.

    Good luck!
  10. rosy2


    the best way to play it is to send me an email or instant message. I will post a better bid/offer for you to hit. my yahoo chat id is "makebidoffer"
    #10     Nov 4, 2006