OPTION BANDITS

Discussion in 'Options' started by white17, May 21, 2001.

  1. white17

    white17

    Did anyone else read the article in Barron's re; the exchanges whining about "bandits" using the auto-ex systems to arbitrage among the exchanges?? Preferred was one of the brokers listed as having clients on some sort of watch list by the exchanges.
    This morning I placed asell order at the bid on PCOE. It did not execute but immediately showed up as the best ask replacing CBOE's quote.
    So the question is; is auto-ex turned off or was it because the exchange is monitoring orders from Preferred et al??
     
  2. def

    def Sponsor

    white17,
    The link to the story is: http://interactive.wsj.com/articles/SB990117695657551270.htm

    In your case, it sounds like the autoex was turned off before you sent the order.

    Personally, I think the exchanges have it all wrong. Rather than protect the floor trader, they should be improving their systems and linkages. I'm still waiting for an electronic options exchange in the US to come around that offers fills on price time priority.
     
  3. white17

    white17

    DEF; I suspect you are righ about the autoex being off. I subsequently made the trade on CBOE bout an hour later and I'm sure it was autoex.

    Right you are about not protecting the floor trader but that's an ongoing battle.