Option activity at market open?

Discussion in 'Options' started by rickf, Apr 10, 2007.

  1. rickf


    Say a stock is up dramatically in pre-market.

    On a few occasions recently, I've placed buy orders for current or future-month calls on an equity a few minutes before the market opens --- and to my surprise, the order got filled either at the closing price from the previous day, or very close to it but still within my limit. And then soonafter, the option price increases to reflect the changed value of the underlying.....as I would expect.

    Most of my buys are for future-month contracts (ITM) if not also LEAPS (ATM). I understand the nature of the greeks on option pricing --- but is there something different or special about how orders get filled during the frenzied minutes at the market open? Is there a more scientific or "ideal" way to place buy orders on such positions before the options price reflects this overnight gap up? Or did I just get lucky?

    As a relatively-new options trader, it's yet another interesting item to ponder in this grand yet exciting experiment into derivatives-trading....:)
  2. MTE


    Options don't trade in premarket and a market maker or anyone would be really dumb to trade with you at a price that doesn't reflect the current market price.
  3. cdowis


    I'm guessing there may be open orders from the previous day, for example GTC, market orders from traders trying to liquidate their positions. These orders vanish quickly.

    I've seen some crazy bid/ask at market open to catch some of these orders.