How do I close trades when there is no bid / ask

Discussion in 'Options' started by nravo, Aug 3, 2009.

  1. nravo

    nravo

    I'm using IB and I have a couple futures options positions on that are way the money or way out of he money, and I'd like to close them. But there's no bid ask on those strikes. trading on theNYBOT and the eCBOT. I guess they don't have to post bid-asks. Strategies? Hate to think I just have to sit on these for 10 days until expiration or until the market moves a little against me and I can close with a proper bid/ask. Damn, I would hate to be in a losing position and have this happen. One of the caveats to trading low vol oftions on Ags electronically?
     
  2. Post a limit at a price you want to get.
    If you are DOTM chances are you will lose all the premium.
     
  3. Bob111

    Bob111

    i ask the same question for bonds looooooong time ago. they put such a ridiculous constrains which basically against any logic. i cannot close my position or place an order, if there is no quotes no both BID and ASK from some third party exchange. so-my offer will sit on IB server,showed as submitted, but in reality-sitting on middle of nowhere,without any chance of being executed. how the buyer is going to find a seller,if seller doesn't allowed to show his selling price?
     
  4. dmo

    dmo

    For your deep in-the-moneys, you can just do an offsetting futures position. For example, if you are long 2 ditm calls, you can sell 2 futures contracts, locking in the intrinsic value of the options. If you like, you could also sell 2 puts at the same strike as your long calls, squeezing a little more time premium out of the play. That would give you 2 conversions. Other than some pin risk, your position is neutral - everything's locked in.
     
  5. nravo

    nravo

    I wrote a put, three days ago; it's now worthless. But there is no bid and ask, and when I post one I get a crazy ask. Is the bottom line here you are fucked and have to wait out the trade to expiration or it starts to turn against you? Blows, if so, and the last time, I'll trade a futures option electronically. Can't even take profits. Jeeze.
     
  6. nravo

    nravo

    Thanks. Will keep that in mind for long calls or puts. I also have a covered call, I want to take profits early on, and a short put that worthless. Any strategies for these.
     
  7. dmo

    dmo

    Does IB have any floor access - any way to get a quote from the pit, and put an order into the pit?
     
  8. I can only speak about how this works for bond/STIR futures.

    A mkt-maker will do the conversion or trade the deep ITM option for you for a very small bid-ask, as it's no real risk for them and that's their job description. Funnily enough, it's not economical for them to actually publish prices for a lot of strikes to the electronic system, esp for options that almost never trade. If you have a way of somehow going to a broker (or, better yet, the mkt-maker), you should be able to deal with them. Everything would, of course, depend on the size of the position, as it might not be worth their while.
     
  9. Close a short put by buying a call and shorting the underlying.


    See Attached screen shot with rimm as example

    comm and bid-ask will still cost you but at least you are neutral.

    regards,
     
  10. For sure keep them commissions rolling in. Trade boys trade buy sell, sell buy.
     
    #10     Aug 3, 2009