I just recently had an experience with options traded on two different primary exchanges. They are the OIH and the XAU. Both last week had nice runs, both achieved ITM status with the same amount of time to expiration remaining. The major differences were the primary exchanges that they trade on and the specialist on those exchanges and how those specialists handled the increased volatility. The experience has taught me that I no longer wish to trade options that are listed on the PHLX exchange as the specialist in the XAU options is definitely manipulating the market IMO. I felt this to such an extent that I called the exchange and was blown off. This was common to the PHLX market regulation office, as they refused to return calls. The more someone wants to sweep something under the rug, the more I am convinced I am right...so I called the SEC...explained the situation to the SECs market regulation...they agreed with me and asked that I put it in writing (email) which I did. Now to the reason for this post...I am going to look for other trading vehicles and am considering the DIA, SPY, and NDX which all trade on the CBOE. Would some of you that trade these vehicles regularly please comment on your experiences, volatility, etc so that I may find replacements for the PHLX vehicles that I have been trading. Or if you feel there are better opportunities that trade on the CBOE primarily please share those with me.
I trade SPY options during the 2 to 3 weeks before expiration, when I can trade options with a delta of .7 or better with a spread size no worse than $.10. That means the under-$3 options, because the spreads are typically 2 ticks, although this month the spreads for options in the $2-$3 range have often been 3 ticks. Not sure why, as volatility (VIX) is about the same as it was a month ago. I trade 10-lots, and there's always sufficient size for me at the NBBO. Volume on the ITM options is kind of low, several hundred per day in each strike, so don't expect to get filled inside the spread. I get price improvement at the BOX and, I think, CBOE, about half the time I get filled at those exchanges. DIA options recently started trading on multiple exchanges, so the spreads are no longer obscene, but I haven't traded them recently.
============= Noticed that recently on DIA, also; probably because ISE won a recent court case , Judge Baer basicaly ruled options on DIA are different from options on DOW. DJ & MHP plan to appeal, see yahoo.com/ finance,ISE. Most all busineses do better with competition, like QQQQ & SPY options on multiple exchanges. Philly & all of them seem to do better when competing. And while its a general statement, the less i cancel limit orders; generaly the better fills i get on liquid options. Use IB & OX for brokers , have excluded AMEX; but it looks like the newly annointed CEO of AMEX maybe fixing it, traded some XOM options,but forgot to exclude AMEX actually got a good quick AMEX fill on them.