Don't know if any posters here were trading them some years ago when the spreads were $5 and $10, but curious if you find it more profitable now with the penny spreads or when we just tried to get in at the bid and out at the ask for the $3 or $8 profit
When the Q's were first launched they were a single listed options product on the AMEX and the spreads were wide. As a retail trader you would not have been able to buy on the bid and sell on the offer unless the underlying had moved significantly. The spreads were limited to less than 5 or 10 dollars on individual options series but they were a heck of a lot wider than they are these days. Over the last 10 or so years that product is now listed on every options exchange and naturally its all screen based too so the spreads are razor sharp. It was quite a lucrative pit to stand in back in the day.
"As a retail trader you would not have been able to buy on the bid and sell on the offer unless the underlying had moved significantly." I don't understand this. My whole trading was of buying on the bid, then immediately placing an order to sell on the ask and pocketing the $8/contract I made. And SOES made it possible for the small traders to step in front of the line to get filled.
Sorry but the SOES system is not an options system so you were not doing it with QQQ options. The SOES system was for nasdaq stocks which had very low volume and liquidity.
That's true and it was before my time trading, but unless you are talking about buying and selling at the bid/ask simultaneously, buying at the bid and turning around and selling at the ask was pretty reliable for me if there wasn't a big movement. That aside, just curious if anyone else who traded that method still trades options on the Q's and how the penny spreads work for them.
So now you're saying you didnt do it ?? You simply dont get to buy on the bid and sell on the offer unless something has changed in the bigger picture, like the underlying moving. There never wa sa reason or a rule which would for or let the MM's have you buy on the bid and sell on the offer. Why would the market let a retail trader buy on the bid and turn around and sell on the offer?
Tell me why you couldn't buy on the bid and sell on the ask? "Why would the market let.." .. - What is going to stop them?
Ok here is what I am saying very clearly: I. SOES- I didn't trade stocks back then but had read that SOES gave rise to SOES Bandits as they were called because small orders (less than 1000 shares if I remember right) would go in front of the larger orders. So they too were buying on the bid, selling on the ask. 2. I regularly would buy calls on the bid ( I usually never bought on the ask). Often I would place my buy order right below the bid hoping to get filled if there was a slight pullback and that became the bid with me near the front of the line. I would then cancel that order if it looked like the Q's were tanking and that bid was going to become the ask price. If I did get filled I immediately placed my sell order at the old buy(new ask ). First order in, first order out, I don't think the MM's had much choice in whether my order was filled if it was hit. The disadvantage to what I did- I missed some runs because I wouldn't buy on the bid as it was going up and sometimes I slipped up and got filled as it was tanking.
"The disadvantage to what I did- I missed some runs because I wouldn't buy on the bid as it was going up and sometimes I slipped up and got filled as it was tanking." Misprint- meant to say " I wouldn't buy on the ask as it was going up "