How to pull the rug on SPX market makers

Discussion in 'Trading' started by HedgefundTrader2, Aug 17, 2007.

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  1. Oh its just time to post the actual facts once more ....

    The market does not have to fill other orders on the price of your order. If you split the bid offer spread and if that series trades on your price then you get your 1 or 2 lot.

    If the market going in on a particular a call series you want to trade was 19 bid... offered at 23 and you bid 21 for a 2 lot the mm's are under NO obligation to fill any other orders at a price of 21. The beauty of that is that if another order for greater size comes in and is placed on the box, say an order to pay 20 for a 50 lot, your 21 bid for 2 actually protects that order since now no one else but the pit can see that 50 lot bid and when the futures move down to the appropriate price they will simply sell your 2 lot at 21 and then sell all 50 at 20 immediately so long as the futures fall to a price where they feel there is sufficient edge as to buy the futures and sell that 50 lot at 20. If the futures move up they won’t bother filling your 2 lot nor would they be interested in selling the 50 lot at 20 bucks. But it gets even better, if other orders in nearby strikes come in and they end up buying options from those other orders they always have both your 2 lot and the hidden 50 lot to lean on in order to sell them at a higher volatility level then they just paid in a different strike.

    In essence the 1 and 2 lots are helpful in allowing the pit to lean on any other orders that might be out there. The beauty of the “out back” or the large collection of mm’s who only trade 10 up is that they keep the bigger greedy mm’s from leaning too long on those hidden gems like the rare 50 lot that might be put on the box. The 10 lot crew is more willing to trade the 1 and 2 lots for a lesser amount of edge then the big firms.

    Of course almost all the of the size order flow, say 25 lots and higher don’t get put on the box and they’re held orders by floor brokers. Also, few of them are retail orders and only retail orders have standing in the pit. So all the off floor orders that come from prop houses and institutions have no standing don’t get put on the box for all to see and contracts can trade all day long on their price and they don’t have to be filled. Then again most of that order flow is shopped to other prop firms and other off floor liquidity providers before those orders ever hit the pit. Then the floor broker simply walks into the pit and since he now has both the buy and sell side of the order he crosses it at a pre agreed upon price and he may dish some off to the mm’s to keep them happy.

    It all has a place in the market and unfortunately in a product like the SPX since its aimed at the institutions not the retail guy, that little 1, 2 and 3 lot retail guy gets screwed.
     
    #281     Sep 7, 2007
  2. Good. Go right ahead - I'm very happy that you know how to whine proficiently when people state the facts with you. What's even better is you have shown a complete lack of understanding of the product that you trade (if you even trade at all)

    Good luck - it definitely looks like you're going to need an awful lot of it.
     
    #282     Sep 7, 2007
  3. Additionally, to follow-up, your "inexplicable insouciance" (thanks Dan) and disrespect towards people who have considerably more experience in the markets that you purport to trade is extremely fascinating. Gary, I look forward to following your "trading career" with great interest.
     
    #283     Sep 7, 2007
  4. zer0

    zer0

    I agree, this thread is fascinating ! It's like watching Monthy Python's :D
     
    #284     Sep 7, 2007
  5. ZerO

    People love a good train wreck and day's an engineer with no expereince or skill.
     
    #285     Sep 7, 2007

  6. Why don't you just go away? Why keep beating yourself against people stronger than you are ? You have nothing to gain. Being pain in the ass is that what you think will work on me? Has it ever worked you stupid pathetic moron of this world ?
     
    #286     Sep 8, 2007

  7. Thank for sharing your tall tales. We play BIG stories.

    I care less what you do, hang paper nails at a paint store or run the god forsaken CBOE. It makes no difference to my life as a SPX trader.

    What I do is what I am good at. I skinned lots of rabbits like you, and I do it everyday in the markets. You should just pray, you never come across me once in your life.

    You may be playing with 1000 lot orders and talking big makes no difference to the strategy that is employed by me engineered to perfection that scares the bejuses out of greedy swines at CBOE and their market makers. When a 1 or 2 contract ( out of my 20, 30 lot order) hits the wide bid and ask at mid point like a harpoon, these wide bids and ask collapses. They fill me up before they fill 100 contract orders, cause they stand to lose a lot. They fill me up out of GREED and SELF PRESERVATION, not due to some rule book or some process. Its common sense, if I had been on that side of the table and if greed was my game, I would do the same.

    So stop bringing in these rules and regulations and how BIG you play, learn something from me, or scoot off into nothingness.
     
    #287     Sep 8, 2007
  8. Hey Listen gutter mouth,

    The moderator has not done a thing, you are still here, maybe its a free for all. I can skin your butt naked if this how this forum works with pathetic vermins like you go about using profanities and F@@ words.

    You ain't no match to what I can diss on you, you lousy little piece of crap.
     
    #288     Sep 8, 2007
  9. mde2004

    mde2004

    Give it up day7793. You are wrong about the SPX and you know it. Admit your defeat and move on.

    Stick your meat between your legs and paddle on clown.
     
    #289     Sep 8, 2007

  10. I don't need preaching from a gutter-mouthed hard drinking imbecile who mentions Bentleys and Strippers in a post about SPX market makers. If you were nice , I would be nice. If you are an ass, I am a bigger BOOT. Just remember, I am restricted by this forum and what I can dish you here, otherwise you would be sweating bullets under your arms, you lousy piece of human garbage.

    Get lost and don't ever try this with me, or with anyone.
     
    #290     Sep 8, 2007
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