Option market makers offering subscriptions

Discussion in 'Options' started by sync97, May 14, 2012.

  1. sync97


    There seems to be an influx of option markets makers offering subscriptions promising you to give you on info on options that might move.
    I am sort of puzzled on this.
    First of all I can't figure out how they can provide quotes to customers and be on Twitter or on subscription services during trading hours to share trades at the same time?
    I used to sit at an options market maker desk and trust me we sometimes had to sit and answer quote requests when we really
    badly needed to take a break. You have to provide a quote within
    a certain time frame.
    If they are so successful in trading big volumes and market making why are they offering such subscription services?
    Your thoughts?
  2. rmorse

    rmorse ET Sponsor

    It's not clear to me what they are offering. Can you either email me a link or post a few here?

  3. sync97


  4. rmorse

    rmorse ET Sponsor

    All they are doing is giving you their trading ideas and charging a monthly fee. It's like paying for research. If you can make a return on the subscription by using the trading ideas you like, it's worth it. I can't see paying for this type of service unless you don't have the time to do the work yourself. You still need to filter through the suggestions to find the ones you like.

  5. sle


    What an awesome scam! I want in!

    For a low fee of $29.99 a month, you can have my thoughts on market positioning and my trade ideas (of course, after I have executed them). For additional $5.99 a month you can have variance and vix dealer positioning and vix/variance trade ideas. :p
  6. rmorse

    rmorse ET Sponsor

    I'll take two........
  7. And it's all gravy if cnbc gives you a lot of free marketing.

    OT: anyone know of some good write-ups (or want to trade ideas) on levered etf options strategies (not lottery tickets, but selling the options on fundamentally flawed securities in a delta-neutral fashion?).
  8. sle


    I do some of that, liquidity is pretty low but sometimes you get very good opportunities. The general idea is to play option price based on vol vs spot drift based on the same vol.
  9. Do you have a free trial for your var trade ideas? :)
  10. there's nothing stopping someone signing up for one of these relatively cheap ("about the price of an option trade a day") 'exclusive trade idea' mailing lists, then in a month or two reverse engineering whatever they are using to find their ideas.

    if they are valid ideas you have yourself a holy grail for $50 and some tinkering, if not, you haven't been too bent over by the market, and only gave someone your lunch money once.

    i'd imagine you'd get notices on "unusual option activity" on a stock or two per week, as they come up (or perhaps after one of their larger clients have already put the 'unusual' position on, and it's on the tape for everyone else to see.)

    perhaps something like getting a heads up this morning that GRPN had big activity on a certain call, way beyond the average volume or open interest, and a strike or two away. for that trader with that large option position put on this A.M., he was set from the time he put the trade on. for any trader that followed him through the day, they were also happy by after hours, but, they also probably allowed that first block trader to lighten up into them all day, having a free/cheaper bet going into close, while everyone else had bought a lottery ticket.

    eventually, if the style of trade suited you, you'd just be scanning for the option trade ideas yourself, knowing what to look for in the options chains, knowing the risks/rewards of the potential outcomes, (they are often binary bets on an event, win or lose; earnings, FDA announcements, buyout rumors, etc.) do you want to buy/hold the lottery tickets? or be selling them to the 'lucky' rubes down the line?

    #10     May 14, 2012