options on NQ so wide? (ask/bid)

Discussion in 'Options' started by jasonjm, Oct 16, 2006.

  1. You may find with NQ options that if you place a limit order inside the bid/ask that you will get some reasonable fills. I have not done this my self but this is how ES options were a few years ago. I think it is liquidity spilling over from other markets, with computure always searching for arb opportunities.
    #11     Oct 17, 2006
  2. jasonjm


    are the marg requirements on NDX also gonna drop in nov??
    #12     Oct 17, 2006
  3. Yeah, because you'd never have the exact same problem holding a long SPX contract overnight when a "9/11 type event occurs".

    People have an amazing irrational fear of selling options. If you're over-leveraging, it doesn't matter what you're trading, you're going to "lose your house" anyway.

    Think about it this way: If you'd hold 5 ES contracts over night, then you're perfectly fine holding 5 ES options overnight.
    #13     Oct 17, 2006
  4. just21


    Margins on everything that is now REG T should drop. NQ, ES, ER2 are options on futures and use SPAN margining which is much lower.
    #14     Oct 17, 2006
  5. I'm not comfortable holding 5 ES contracts overnight -- if I'm going to be holding futures longs overnight I always buy some far out of the money puts as insurance. :cool:

    My post was not intended to say that you cannot sell options and be profitable provided you properly manage risk. It was intended to make people think twice before cashing in on the "easy money" they get selling premium on options they think will never be in the money.
    #15     Oct 17, 2006
  6. SSB,

    I believe your post was very well intentioned! You touch on an oft discussed topic here in the Options Forum.

    I'm sure you've read Fooled by Randomness. Taleb had a nice way of putting it:

    "It is a platitude that children learn only from their own mistakes; they will cease to touch a burning stove only when they are themselves burned; no possible warning by others can lead to developing the smallest form of cautiousness..."

    In addition, over-confidence -> over-leveraging can result from a few consecutive wins.

    We can give the OP the benefit of the doubt that he knows what he is doing though :)

    2 cents.

    #16     Oct 17, 2006
  7. jasonjm


    hmmm maybe someone can help me on this one

    tuesday morning i logged in and decided to sell a NDX put just to check out some ideas

    anyways i sold a nov 1550 put for 4.00

    now, at the end of the week, even tho NDQ has hardly moved, the same put has closed at 1.90......

    how did that happen? was i just super lucky?

    Also what is the best cheap software to predict the price of options based on underlyings price and i guess volatility, and time left of course till expiration?

    I dont suppose any of the IB free tools can do this?

    thx all
    #17     Oct 21, 2006
  8. jasonjm


    BTW all I understand leverage

    I been trading forex for 6 yrs, including fx options, u can get virtually unlimited options in forex
    #18     Oct 21, 2006