I want to trade futures options, specifically on energies (CL,NG)...any suggestions? I wanted to go through IB but they don't offer them. Looking at Xpresstrade as well but read negative stuff on pit executions.
Have you considered Lind Waldock or Man Financial? My broker at Man Futures tells me that NG is the most elusive pit to try to execute trades and get prices from. He did say that it is easier with crude. However, the RtoR with NG is ridiculously better.
I've heard of the pit hanging up on the phone if they don't think there is enough size in your order. it is pretty tough to trade, I'm hoping they go elrctronic sooner rather than later.
It'll be years before options on physical commodities migrate to the screen. Just a few minutes ago I was able to sell CH7 synthetically (I'm long futs and they're limit bid @396.50) in the options at 414 on a 410-415 quote via a floor broker who legged it for me. Yesterday Corn opts traded 175,000 contracts in the pit!
Gas can be problematic; if you're doing more than one-lots get yourself a traditional broker who will call the floor and give you a firm market on an option while you hold. If you send electronic orders down there you'll save a few bucks in commission but will get jerked around on fills (they'll trade around your limit order all day). CL front months (near-money) are pretty liquid and generally 5-wide so I feel comfortable sending electronic stuff down there via any discounter that has a floor broker on the Merc (Lind/Man/RJO). Just be prepared for late reports since the clerks like to dick around on small lots.
Maybe a year or two before screen volume really picks up, but it will happen sooner than you think. I'm currently working for a firm that trades Natty and Crude options via OPEX and WhenTech's Pit Trader, and last week we had a Globex rep come out to our office and talk to our energy options guys about putting NYMEX options on the screen. He said took look for them on Globex beginning June or July this year, no later than the end of summer. Save this post. You will see. And whoever gets the CBOT -- be it the CME or ICE -- you will see grain options on the screen faster than you can say iron butterfly. Nowadays screen-traded bond options volume represents on average about half, if not more, of the total trade in those products. And after the DOW tanked last month, there have been more than few days when more 30 year options traded on the screen than in the pit. Last week, CME launched a new Eurodollar options trading platform (aka EOS) which allows user-defined spreads to be traded electronically, and they made it cheaper to trade on the screen than in the pit. Everyone thought Eurodollar opts would be the last viable options pit, even outlasting commodity options, but the CME wants everything on GLOBEX, and fast. (Hey, they need more volume to grow earnings, right?) I heard they even cut the floor operations budget and are rationing blank floor trading cards. Look for screen volume to bust out as soon as the Goldman's, Lehman's, hedge funds, and some designated market-makers get used to the new system. They trade some crazy spreads in the EDs -- stuff the grains will like never see. And if the CME can put them on the screen, the outrights, call/put spreads, straddles, and strangles that mostly trade in the grains will be easy to put on the screen.