Most Liquid Indes Options

Discussion in 'Options' started by tjuggler, Aug 8, 2003.

  1. tjuggler


    Between NDX, SPX, XMi, OEX etc., which are the most fair and liquid options to trade? Thanks in advance to all who respond.
  2. But my vote goes to QQQ. I had traded OEX since 1997-98 and have basically abandoned that index unless there is some exceptional opportunity that I am willing to sit on for a period of time. Depends on what you are looking to do with the options as well. But I think the QQQ is solid because it has alot of liquidity, tight spreads, etc..
  3. Did they ever resolve the tax status of qqq options?
  4. ====================
    I use generally,market orders to get out & limit orders to get in;
    QQQ options may be the most liquid.

    Still looking into the apparently bigger volume of the SPX contracts;
    its NOT reflected in the bid /ask of the SPX options i have

    studied and searched.

  5. vega



    Not sure what volume you're speaking of, and honestly I haven't looked in a long time, but keep in mind that the majority of the trades in that pit are some form of spreads, be it simple call or put spreads, risk reversals, straddles, strangles, butterflies, or even rolls. Sometimes in that pit the volume is very skewed due to 2 or 3 large orders that day. Many times, the locals don't even get in on the trades (as all large orders are shopped around upstairs first, meaning anything getting to the floor is probably crap). But if you are not trading huge size (100 plus contracts), although the bid/ask looks large, if you can trade through a broker, most of the time you can get a 80 cent wide market, and probably get filled between the the middle and the bid/ask. If you are simply trading electronically, well--I guess you're screwed !! FWIW, I traded on the floor in that pit for a while, and worked in the NDX for 5 years, and OEX for 2 years, so I would be happy to answer questions on the SPX,OEX, and NDX.

  6. = = =
    Was referring to volume [total, year to date] in SPX contracts looks equal or exceeds QQQ options;
    however QQQ puts & calls generally have bid /ask spreads of .05-.10-& [some .15, especialy at turning top & bottom points.]

    Of course SPX [ & SPY] is more diversified, much more widely followed index and benchmark than QQQ.

    Question on SPX, OEX,NDX;

    October & November tend to be highly directional in the NDX,QQQ,SPX,SPY.
    Certainly were last Oct,Nov.

    On the 5 years + you worked in the NDX option pit did you see that highly directional move in SPX,NDX, option contracts in October,November.???????????????????????????????????

    Certainly were last Oct, Nov;
    thanks for all your details.
  7. vega


    It did seem like there was an upward bias at the end of the year, but then again, back then there was an upward bias all year long !! Volume definitely picked up in OCT and NOV, a lot of that due to the fact that it is soooooooo slow during the summer, that almost by default it had to pick up in the fall, and in DEC things seemed to die down quite a bit, largely due to the fact that everyone was closing out positions for the holidays/end of year, and not really opening new ones. Also, since a lot of the people had done pretty well during the year, they didn't want to take a chance on blowing their bonus by putting on a position at the end of the year when the markets wouldn't be a liquid so people tended to trade smaller size at the end of year. Not sure if that's the answer you were looking for, but as far as volume at that time of year, that's the story.

  8. = = =

    In your 5 years + in the option pits did you notice a discernable difference in the best
    % gainers in the following groups???

    [1]Spread traders???

    [2]Straddle traders???

    [3]Trend traders [You probably correctly guessed either direction;
    but one trend at a time] ???

    Ps. Good answers ;
    I am rereading my book ''The Market Makers Edge'' by Joshua Lukeman.:cool:
  9. vega


    5-6 years ago, in the NDX, individual option markets were 10-15 DOLLARS wide !!!!!!!!!!! Back then, the one month straddle would be quoted 240-270 (although NQ futures were at 4000 !!!! 30 bucks wide !! But, in their defense, please remember that at the time, the NQ futures were also 30 bucks wide, and the market was a lot thinner then, the real thiefs were at the NQ pit at the CME, and it was not uncommon to miss futures by 10-20 pts--yes full points. So for the most part, everyone tried to stay relatively flat --both volatility and delta neutral, and made a killing just on the bid/ask spread. Now, although a lot of times there would be orders crossed at fair value, a lot of orders just hit the bid or lifted the offer (mainly retail, but imagine making $10000 just trading a ten-lot of options by buying the bid, selling the offer !!! For the most part, guys that did the best, and continue to do the best are the ones that are still trading the bid/ask, and not trying to directionally guess which direction the market is going to go. Although people may set up their positions to profit from moves up or down, most of the money was made on essentially spreading off options you were long against those you were short, and managing that risk.

  10. ===
    Good read especially the last sentence;
    sounds like higher volume & compettion helped everyone.:cool:

    Just got thru rereading an interview with Bill Brodsky[,in Stocks,Futures & Options mag.] where SFO compared them to a ''mousetrap'':D Funny that Bill Brodsky didnt disagree.

    Gets better,Bill Brodsky noted ''traders & investors have to have ways of riding them out;
    or diversyfing themselves to protect themselves.''

    Want to share some additional insights, seven [7] is a good number???????

    When your gut tells you to get out;
    first make sure your gut has absorbed lots of bid prices or charts before you got in !
    #10     Aug 29, 2003