Hi guys, I've been interning at an options market maker for a couple weeks and they intend to start me trading live in a week. So at the start they will only let me trade at the money strikes, I've been thinking about all the ways I can make money within this limit. Does an experienced market maker have ideas/inputs in doing this? Cheers!
What symbols? Are the options traded in nickles or pennies? What exchange? Is this their money or your money as 1st loss? If it's their money, they should tell you how to proceed. Yes, I was a MM for a long time. I stopped in 2010. Too much PFOF, costs increased and markets are to fragmented now for a local to run a business that way. 1245
Hi, sorry for not providing enough specifics. I'll be trading the options on the KOSPI index futures. Not 100% on your second question. I believe it's the KRX exchange. It is the firm's money. They've put us through a crash course on the basic arbitrages and dabbled on position management/gamma trading. However, seeming that I'm only to trade 1 strike for the time being I'm not 100% sure how to connect what they've taught me on to the live screen. I have a vague idea of locking in the spread and hoping the hedge doesn't go against me but other than that avenue it seems pretty hazy. I'd probably get a better idea when I do start but I just want to be as prepared as possible when I start live. Cheers!
My questions were assuming you were trading equity options in the USA. You're not. If they have not provided direction for you, test and see what works. You can start with being on the market small and matching the best bid/offer. Go from there. Play small.
This is absurd. You are going live without shadowing a senior trader? Usually you spend 12 to 18 months working underneath a trader so you learn the mechanics of making markets. Making markets is very formulaic and structured. Once you learn this as an assistant then going live should not be an issue. This is a very strange operation they are running.
Mav..that was my thought too. I think without proper training and over site, they are setting you up to fail. That is a shame. You get one shot with this.
My firm is a bit different but I can be rest assured that I'm not being set up to fail. As I was saying I'm an intern for a short period of time and I'm still in college doing my degree.
possible that you will represent them in the pit,you will act as a market maker taking orders from them, they may be just in need of a presence there, not enough info ,either from you or from them to you