To make money for market makers, the exchange, and people with inside knowledge so they can take huge leveraged positions when they know something is about to happen. Most everyone else gets raped.
I dont trade options but am curious. If you encounter a huge move like that couldnt you take the other side of your option trade with an equivalent amount of stock and lock in your gains?
but you can't do it if you've got a stuck order and you cant get confirmation of if you got filled or not, otherwise your naked the other way.
have you read this thread at all? I tried limit and bid when thru me without a fill, thus I went to market.
i posted an update in another thread, the order was surprisingly cancelled, if GOOG had tanked another 50 pts I wonder if I would have been filled.. currently == 24 was = 37
I know all about erroneous crosses. My group traded crossed markets for years leading up to the Palm spinoff. The execution is cut any time there are stale inter-exchange crosses. There can be intra-exchange markets that are off by a figure, but not inter-exchange. You're at fault for not moving stock once it was obvious that there was a problem. Nobody with any experience would route an option market order in that scenario. The march 380 $vegas weren't an issue with the stock <350. Your deltas overwhelmed your vegas by an order of mag, and your comments about attempting to earn on the vol are absurd. Your primary concern is your deltas.
Let me know when you're done editing this post. I don't see any mention of you hitting the bid. Feel free to refer to that post. If I saw an inverted or 30-wide market I would flatten with stock.