OEX market makers

Discussion in 'Options' started by roncer, Mar 13, 2007.

  1. roncer


    I traded 5 different OEX options contracts today. There were two contracts where the MM's were operating righteously and I was not only posted and filled promptly but even filled at better than my stated entry price on two occasions. I want to put this information out because most of the MM's seem to fudge or actually just clip you out of some money quite often with their delays to posting your price and or fill, etc. However the market maker for the OEYCH is playing it real honorably and also the MM on the OEYOF is being very straight.

    The 3 other contracts I traded were much slower to post bid/ask and I switched out of them pronto as it's hard enough making money in the market you don't want to be fighting with a MM that delays posting to exploit and increase his edge.
  2. roncer


    I think if us OEX traders would start commenting on what contracts seem to be working right and which ones have extended delays we just might influence the efficiency down on the floor. Of course I am a very short term trader and I often cover a trade in 15-20 minutes so I do a lot of entering, exiting and canceling of trades so delays in posting of price may be more of a problem for my style of trading.
  3. ajna


    Purpose of the market maker is liquidity provider. In turn, they get the liberty to screw you a little. It's the cost of of doing business for the rest of us.

    Your only recourse is to either trade in more liquid strikes/months, or trade other products that are fully electronic and more liquid.

  4. roncer,
    I have been trading the OEX for many years and I agree with you that sometimes the fills and info posting is good and sometimes they suck!
    The problem cannot be totally eliminated but it can be minimized by checking the volume on the options your about to trade,
    before you place the order.

    My hat's off to you for being able to get in and out several times in a day,
    I am usually good for 1 day trade per day (using pivots) and
    8-10 swing trades (using mechanical systems) per month using OEX options. Beyond that is just too frustrating because of the problems you mentioned. Also the recent increase in the VIX blows the OEX option prices to the moon, and then of course when we have a few ups the VIX collapses and the option values quickly recede like a frightened turtle.

  5. roncer


    In spite of the limitations and drawbacks of the OEX I still favor it over the other index and futures options I have tried. I usually trade contracts that are very close to at the money as the bid/ask spreads are generally tighter and the liquidity also seems best.

    Once again the primary reason for my post was to try and provide information about the variation in efficiency I am finding amongst the different OEX contracts. And this variation seems to be connected to specific market makers. So for example I will exclusively favor trading the OEYCH calls and the OEYOF puts into expiration as the market makers for these contracts have demonstrated honesty and efficiency in their methods. :)
  6. roncer


    Found some more honestly managed contracts today. These were all good that is the fills were prompt and occasionally better than entry price:

  7. rosy2


    can't everyone post (and have the world see) better bids and offers for OEX options? which would make everyone the marketmaker.
  8. roncer


    Above post was an error.

    Found some more honestly managed contracts today. These were all good that is the order posting and fills were prompt and occasionally even better than my entry price:

    OEYCF........fast ...around 5 seconds similar to trading emini's.

    OEYOG.......a real dog.....very, very slow....not a contract for day traders.
  9. roncer


    rosy2.................Yeah that is sure what I would like to get going. We need to try and create a little transparency. I think the market makers would at least to some extent start reforming a bit if they knew their knocking down dishonest methods were likely to be commented on for many traders and maybe even for their bosses at the exchange to see.

    I plan on continuing to post my experience with the different OEX contracts that I day trade. :cool:
  10. MTE


    Slightly off-topic, why do you daytrade options facing exactly the problems you describe when you can avoid the whole thing by going to futures?
    #10     Mar 15, 2007