OK Day - I would think that you probably have seen responses like this in the 40+ pages - but you initially proposed splitting the B/A and said that the MM would take it out to open up his ripoff prices for larger orders. My reponse meant that it could have been another trader or arb that picked off the order, not necessarily the MM who felt forced to do it. I doubt that. Of course - the biggest pick off artists are the MMs so it could have been the MM but not because he felt forced to do it. Only that the order became too favorable to the other side. If the MM is not interested in the 2 - lot he'll likely let it sit all day unless it becomes a steal.
When you hit them with 1 or 2 contracts at mid points on abusive prices, the bid and ask narrows, now others start jumping in at those tight spreads. Try it , it works like magic. You get filled quickly and the abusive bid and ask goes back in place as if nothing happened. There is no need to review lengthy rules and regulations and how the SPX pits operate. This is a strategy not rocket science. Use it for saving hundreds of dollars and getting in and out of SPX trades quickly.
Your point is taken. I'm sure that it will help those unfamiliar with option markets - so thanks for sharing it - and anything that improves liquidity is OK by me.
My sincere recommendations: Donot trade SPX If you don't have to. Migrate to other Indexes like NDX, RUT,IWM, SPY. If you do get caught in a position on SPX and your order is sitting there not getting filled, and you need to get out fast, use the above method, break the wide bid and ask and get the hell out of there and don't go back.
I did notice that the quotes on the NDX refresh faster than the SPX. Is it not the same electronic system?
The NDX is listed on 4 exchanges and its access is totally electronic. The answer is yes its a totally different system and its more user friendly for the retail trader. A retail trader will also benefit from the NBBO in the NDX