Option Market Maker Questions

Discussion in 'Options' started by VanishingMediator, Apr 16, 2014.

  1. TskTsk

    TskTsk

    Consider that if any of this took place, that means the market would have to be super inefficient. Are they? Also since MMs, as far as I understand, manage global risk and global correlations, for any of this to take place would require all markets to move significantly out of place just to screw you over.

    I think you are paranoid
     
    #11     Apr 16, 2014
  2. Brighton

    Brighton

    Famous derivatives trader Jerry Seinfeld had some advice for this type of situation:

    "If every instinct you have is wrong, then the opposite would have to be right."
    - Jerry, to George, in "The Opposite"
     
    #12     Apr 16, 2014
  3. Perhaps I'm slow, but I just don't understand why any trader when 'making hundreds of percent returns in single days' would worry about tiny movements on price entries. lol
     
    #13     Apr 16, 2014
  4. I've had stupid white trash trying to laugh at my comments because I didn't use gann angles when they didn't even understand derivative analysis the entire time I have been trading... all 10 years and hundreds of thousands of profit

    So forgive me if I don't care what some snot nosed little textbook reading status quo protector thinks.

    I know the difference between delta neutral hedging and price fixing.

    Gday little bich
     
    #14     Apr 17, 2014
  5. Because they started perving my account apparently
     
    #15     Apr 17, 2014
  6. sle

    sle

    Well, apparently, the market has changed and now you are not the hot stuff anymore. Have you thought that maybe your strategy has been arbed away by HFT? I seriously doubt anyone is arbing/front-running you unless you are doing something remarcably stupid. Hell, I am not in that business, but if you show an away bid for a thousand of contracts you deserve to get pennied or delta-arbed.

    PS. so far it's you who's bitching and trying to "protect status quo", I am merely pointing out that you are either paranoid or stupid (or both).
     
    #16     Apr 17, 2014
  7. SIUYA

    SIUYA

    You are either being overly paranoid, your strategy is no longer working or simply should stop using that broker.
    As for MM strategies - put 10 in a room you will probably get 10 different strategies.
    But they will still all try and get the best bid ask spreads, best hedges for their strategy and are not in the business of charity and are still reliant on the normal forces of supply and demand - they may be price makers, but that usually means they skew those prices to account for this.
    Edit: see what sle says
     
    #17     Apr 17, 2014
  8. This is actually not true in markets though. Markets have 3 outcomes - move, countermove and chop.
     
    #18     Apr 19, 2014
  9. My bad made some money and "quit" for the day...

    That is how I make the money

    My issue is with counter moving as what stardust said. I stare at the option trade history all day. I see single contracts being traded often, and large bundles of contracts being traded that for expirations at least weeks away. This countermove stuff I am talking about happens regarding close to expiration options traded in large bundles. There will be a price countermove and pressure to stay/return there, and less market liquidity when they are in the money in terms of no theoretical price bids.

    I can easily envision some sort of formula for picking a price to maximize option profits by keeping the majority of them less valuable than when sold. Does anyone know for sure that HFTs don't flash bids and asks only for aggregation for reporting what they are doing, and then dropping them to price fix? I mean, when you see a price go up for 5 minutes on 2.5 mil shares traded and then drop the same amount instantly after on 250k shares traded, I call it price fixing.
     
    #19     Apr 22, 2014
  10. 1) Is it "price fixing", "manipulation", "aggressive selling" or just that the order-book is not re-populating with new orders as deeply before the upmove occurred? :cool:
    2) Do you have actual chart examples of what you're describing? :confused:
     
    #20     Apr 22, 2014