option expiration games

Discussion in 'Options' started by riskfreetrading, Dec 18, 2008.

  1. Summarize your understanding of the option expiration games.

    One of my rules/hypothesis: on Thursday and Friday of expiration week, the underlying ETF/index becomes a derivative of the options. Therefore, the underlying/derivative relationship between options and equities are reversed.
     
  2. rc5781

    rc5781

    my understanding of quad witching is that weird shit be happening, watch out anything can happen...
     
  3. how do you make money with that?
     
  4. rc5781

    rc5781

    how do you make money by knowing the underlying/derivative relationship between options and equities are reversed?
     
  5. Not sure how, but I price undelying using options rather that pricing options using undelying. It is more an insight rather than a recipe to make money. If underlying is a derivative of options then the market is manipulated. Maybe avoiding it is a way to make money (by avoiding losses).
     
  6. timbo

    timbo

    Excessive amounts of cannabis usually makes one think backassward.
     
  7. Whoosh....whoosh.. whoosh...

    No, I did not inhale. I'm just a heavy breather :)


    On a more serious note, if there are any IB/DDE/TWS users proficient in Excel, I'd greatly appreciate your two cents regarding a problem I'm having. Math skills not optional :)

    http://www.elitetrader.com/vb/showthread.php?s=&postid=2228437#post2228437
     
  8. CET

    CET

    I also believe I heard there will be S&P rebalancing tomorrow, and this causes some strange trading with big volume near the close.
     
  9. If the problem is really a zero appearing between dde cell updates you can solve your problem by setting iterations to some finite number, say 10, in your Calculations menu, and then using a circular reference.

    If the dde data of interest is in A1, then the following formula in B1 should do it:

    =IF(A1=0,B1,IF(A1>0.30,beep(),0))

    assuming your have created a function named beep
     
  10. dmo

    dmo

    I wonder if the problem is DDE, which is ancient and horrible. Hoadley has a much-improved way of bringing data into Excel - and it works with IB. It is certainly more user-friendly than DDE, as it doesn't use DDE-style hard coding. That is particularly true for option traders, who end up having to do a lot of manual hard-coding with DDE, or use clumsy work-arounds.

    So the Hoadley method would be much easier to use, but I don't know if it would solve your beeping problem. It would only cost about $100 to try it though.
     
    #10     Dec 19, 2008